The February Market Update is starting to get a little redundant, you know? It looks much like the January update.
We still have a shortage of inventory. Builders are still spending their time on multi-family (mostly rental), with over 11,000 units permitted in the last year. That is an all-time high.
We need builders building single family or condos, especially in CenPho.
“Well, Ken, you are a realtor, so of course you want people to buy properties.”
Yeah, but no. That’s not true. There should be a healthy mix. This is not healthy. When you focus too much on rental construction you do three things.
First, you deprive neighborhoods of people who feel long-term connection to their community. This means fewer people doing block watch, fewer people communicating with their city officials about neighborhood health.
Second, when those people decide they don’t want to rent anymore, there are fewer homes on the market for them to purchase. Thus pushing up prices.
Third, once the prices are higher, it deprives people of the opportunity of home ownership. Their savings goes to landlords, rather than to themselves.
Sorry for going all “broken record” on ya.
So, where does this shortage leave us as we go in to 2020? Well, absent some catastrophic market failure, the market should be strong for the rest of the year.
There are no zero-interest loans out there. But there are a ton of AirBnB homes and corporate-owned single family homes that are being used as rentals.
According to Tina Tamboer of the Cromford Report, if the over-all economy drops and people don’t stay in AirBnBs as much, many of those will be put on the market.
We have no idea how many and whether that is enough to force prices lower.
Regardless, due to the scarcity of new construction in CenPho and the saturation of apartments, home prices may stay high even if the economy slows.
So, if you are thinking of buying, don’t expect prices to drop any time soon.
If you are thinking of selling, consider doing it before the summer comes on. The prices won’t necessarily drop, but there will be fewer people to compete for your home.
Call us at 602-456-9388.
