Check out the next podcast in our series on smart real estate investing!
Today Marcia and I discuss the current lack of sellers of residential real estate properties.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Smart Real Estate Investing – Part 6
René Nelson: Marcia, let’s talk about what you’re seeing with sellers in the single family world. Are there a lot of sellers out there or are you looking for people that are interested in selling?
Marcia Edwards: We’re short of supply, so we’re short of sellers, that is a lot of… We’re about 61% short of last year’s inventory, so that is a significant number, that means we have 30% of what we had to look at last year, and we have more than what we had in demand, more buyers out there, than we had last year, so it’s really wild well and tight. The no-brainer is if you have an investment single family that you want to liquidate, this is a great time and do that, because you’re not going to turn around and be a buyer.
You’ve also got seniors who could write sides at this time, it’s good, sometimes it’s important but not urgent, and this may create some urgency so that they a make the move while they still have their health and ability. If you’re leaving this market and going to another, getting closer to family is a common reason for that, it’s a great time to be a seller. So if you’re going to do any of that in the next couple of years, this might be a peak moment with the demand so high, interest rate so low, and the competition so low as well.
René Nelson: Okay. So you bring up a good point, I had someone ask me, her husband has health issues, they currently live up in the Brownsville area, and they need to move closer to Eugene, Springfield, so they’re near major medical opportunities, you know, doctors and the hospital and stuff. So she asked me, “What do you think I should do? Should I sell my house now and buy here?” Even though she knows that there’s a shortage of inventory and prices are, in her opinion, are near the top, which I know they have escalated. It’s hard to have that crystal ball to know next year where prices will be for residential, but with the cost of lumber and everything else, I don’t see a lot of building happening in the next 12 months.
Marcia Edwards: Yes. Relieving a supply side problem is much more difficult and complex, it’s not speculative. In the last recession, we took the hit in real estate in pricing even, because we had so many people over-extended financially. Right now, we’ve got people that are tucked well, $750 was a medium FICO Score for financing and refinancing nationally. Strong buyers with good equity positions are coming in, so it’s not like we’re going to see a supply of foreclosure properties from which to choose, and you’re right, the builders are not building anything under $500,000, with the pricing of materials.
So the problem doesn’t get better or worse, if you’re selling and buying in the same market, you’re basically going to take a hit on one side and benefit on the other, and hopefully if you do it smart, you’ll get the best of both worlds.
René is available to answer your real estate investment questions. If you’re considering investing in a property or want to know how the pandemic may affect your investments, schedule a 15-minute discovery call today.
Recent Comments