To deliver the best experience we store cookies on your device. Please accept our Term of Service to continue.

What Housing Shortage?

We don't have a housing shortage. We have a shortage of desirable houses.

In this article, we will explain the difference, and what real estate investors like you can do to profit from this misunderstood reality.

Problem: Shortage Of Houses In Desirable Markets

Now that work from home has become widely acceptable, and the new normal, an overwhelming number of people have decided to pick up and relocate to one of several more attractive markets. This includes "sun belt", lower tax, and economically well-positioned destinations such as Phoenix, San Antonio, Jacksonville, Tampa, Orlando, West Palm Beach, Miami, Raleigh, Columbus, etc.

The problem is, there simply aren't enough enough homes for all of the people that want to move to these locations. A basic supply and demand imbalance has caused home prices in these markets to skyrocket.

To use emojis, you have people πŸ§‘πŸΎβ€πŸ€β€πŸ§‘πŸ½ who have the same ideaπŸ’‘ to live some place nice 🌴 so they move there 🚚 and try to buy the same houses 🏠 which causes the houses to dramatically increase in price πŸ“ˆ πŸ’°πŸš€.

Solution for Investors: Build More Homes

If you're a real estate investor, you can profit by increasing the housing supply in these markets. You can use OfferMarket's Ground Up Construction program to fund land acquisition and construction budget -- up to 60% of the land cost and 100% of construction.

Solution for Buyers: Consider Other Markets

Make no mistake, there is a housing bubble and mania that has swept through many regions and markets. Fear of missing out is real, and can drive people to make decisions that they later come to regret. Avoid overpaying for your next home. Avoid bidding wars and settling on a home that you otherwise would not be interested in buying in a normal market.

Take a step back and re-evaluate your options:

  • What are some less well-known markets that offer better value and are fundamentally attractive with good prospects for long term home price appreciation?
  • Does it make sense to move right now, or can you afford to be patient and let this housing mania and bubble deflate?
  • Are there off market fixer uppers available for a better value? Subscribe to our off market deal flow.

Shortage Of Houses In Desirable Condition

There is a strong preference among buyers to want turnkey, move-in ready homes. It makes sense: the last thing buyers want to do after paying the down payment on a home is to coordinate moving into a home that needs to be renovated. Not only is it an additional cost, it's a logistical complication figuring out timing to move, contractors, planning the DIY components to save money. The limited housing supply on the market has moved many savvy, daring and well capitalized buyers to consider properties that need fixing.

Solution for Investors: Renovate More Homes

Fix and flip investors are important participants in the housing market. It's one thing to encourage investors to flip more homes, it's another to actually find the distressed inventory (i.e. houses in poor condition) required to increase the number of homes being flipped in a given market.

To find more inventory:

To fund your fix and flip projects, get a bridge loan quote from OfferMarket. We fund up to 90% of the purchase price and 100% of the rehab and can close your transaction in 15 days. This type of loan is commonly referred to at "fix and flip" and "hard money".

Solution for Buyers: Consider Fixer Upper Houses

Buying a fixer upper is a great way build home equity and wealth. There are loan programs for primary residence homebuyers such as the [FHA 203k]9 renovation loan that includes the scope of repairs in your mortgage, allowing you to put as little as 3.5% down and have your rehab component added to your mortgage.

Summary: Focus On Value

Think like value investor. Real estate is an asset, and should be thought of as an investment. As with the stock market, if everyone is chasing the same investment strategy, a bubble forms, prices get out of control, animal spirits and FOMO make buyers overpay.

Focus on markets and inventory that is less desirable. That is where the value is. There will be times when the most attractive markets present attractive buying opportunities -- think aftermath of the 2008 financial crisis (2009-12) in South Florida. That time is not now. Cooler heads and a disciplined approach will prevail.