US Housing Supply
“Jennifer Bryant has made more than 30 offers on houses, mostly from her cell phone, in many cases without even viewing the property. She has lost every bid, and says she often loses to all-cash buyers.” Yuki Noguchi, NPR¹
The U.S. housing supply available for purchase has dwindled substantially cascading from 3.2 million units in April of 2011 to 2.54 million in April of 2012, according to the National Association of Realtors (NAR)*². The trend is playing out real time in markets like Riverside, California. According to Paul Herrera, Government Affairs Director for the Inland Valleys Association of Realtors in Riverside, there are “40 percent fewer homes on the market compared with last year and sales volume is up.” This translates to fierce competition for every home purchase.
Buyers like Jennifer Bryant lament the irony of “vacant homes everywhere,” but not available for purchase due to delays in the foreclosure process. For the State of California, (a non-judicial foreclosure state), the process takes approximately 300 days³ from date of last paid installment (LPI) to foreclosure sale date. It’s a high demand market so rents rise while buyers keep bidding.
Additional markets such as metro Phoenix, Austin, Portland, and many others are experiencing low inventory/ high demand imbalances as well.
INVESTORS
Investors, both institutional and individual, are taking full advantage of record low interest rates and deflated prices.
According to a June 15th release, investor US National Telecom, Inc. announced multiple offers on numerous investment properties. The company is “looking to acquire real estate interests that offer positive cash flow returns.” The US National Telecom homepage details their interest in locating and purchasing properties to rent, hold and sell after the market recovers.
NPR‘s Yuki Noguchi does a balanced job of sharing the success of investors in contrast to the mounting frustration of competing homebuyers. Follow NPR to read or listen to the full story.