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With areas in the West having 30% increase in demand and 50% drop in inventory then coupled with eviction bans. How could prices not see a substantial drop in the nearish future.
Wait . . . so you're saying demand is way up and supply is way down and you expect prices to DROP? That defies the laws of economics. Can you clarify what your question is?
Wait . . . so you're saying demand is way up and supply is way down and you expect prices to DROP? That defies the laws of economics. Can you clarify what your question is?
Well here in Phoenix inventory is low because 30% of properties aren't paying rent (probably higher now, this was December numbers) or mortgage yet are banned from being evicted. At some point those eviction and mortgage deferments will end. What happens then. Supply is down not due to market forces.
With areas in the West having 30% increase in demand and 50% drop in inventory then coupled with eviction bans. How could prices not see a substantial drop in the nearish future.
I can see where the poster is coming from. His question isn't about today's supply or demand but tomorrow's. How much is today's rise in prices driven by temporary factors (a sharp decline in listings) and how much are the prices artificially inflated due to it rather than other longer lasting economic factors.
This time next year the vaccine/herd immunity should be well underway and that will, one thinks, restore some normality to the real estate market. If the volume of listings return to a norm, will it result in a decline in prices?
Personally, I think no. But it is a fair question to ask.
With areas in the West having 30% increase in demand and 50% drop in inventory then coupled with eviction bans. How could prices not see a substantial drop in the nearish future.
Quote:
Originally Posted by DXBtoFL
I can see where the poster is coming from. His question isn't about today's supply or demand but tomorrow's. How much is today's rise in prices driven by temporary factors (a sharp decline in listings) and how much are the prices artificially inflated due to it rather than other longer lasting economic factors.
This time next year the vaccine/herd immunity should be well underway and that will, one thinks, restore some normality to the real estate market. If the volume of listings return to a norm, will it result in a decline in prices?
Personally, I think no. But it is a fair question to ask.
Yes this is what I meant, better worded haha. But yeah what happens when these evictions stays run out and people start to be forced out. Will the homed be bought up/rented out again quickly at current market rates or will there be too much supply and a drop.
I wonder myself when the moratorium is lifted on foreclosures what that will do to the market. Sooner or later the crap is going to hit the fan. One can only look to the melt down in 2009 to see if it mirrors what will happen in the near future. The CBO estimates that this disaster will take ten years to recover from.
All I know is I hope the rental flip sells fast. We should be on the market in about another month.
Yes this is what I meant, better worded haha. But yeah what happens when these evictions stays run out and people start to be forced out. Will the homed be bought up/rented out again quickly at current market rates or will there be too much supply and a drop.
OK Fair enough... I don't predict the percentage of foreclosures will be that high, at least in this area.
There are several variables here when we talk about rentals, lack of evictions, housing supply, etc.
For one thing, it's my opinion that rentals are far more common in multi-unit buildings than they are in single family homes. I suppose that it depends upon the area, but I would think that rentals in single family homes would make up only a small percentage of the overall residential rental market. Further, I would think that people who do rent single family homes probably have better jobs and a more stable income than those who rent apartments and therefore are more likely to be up to date on their rent and less likely to be affected by the shutdowns that have heavily affected the restaurant and hospitality businesses.
Second, when the Covid situation does wane and things start to return to a more normal state, I would think there will be even more demand for single family houses, not less. And this greater demand is only going to push single family housing prices one way... UP.
The only thing that I can foresee that might put a damper on housing prices in the next few years is rising mortgage interest rates, but I expect that to be very gradual and slow since the Chairman of the Fed has all but promised very low interest rates for the next few years.
One other thing that might negatively affect housing prices in SOME areas is the outward migration of people from the large urban centers, but this would serve only to increase the housing prices in the suburbs and the more "tax friendly" states. In other words, you can expect a migration from Blue to Red areas.
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