Why There Are No Houses to Buy in Many U.S. Metro Areas

[Coventina]

Mortgage rates are rising, and the housing market appears to be softening nationwide.

But in many U.S. markets, would-be buyers are facing a big problem: there’s just nothing to buy. Housing inventory—the number of homes on the market—has been falling since the rebound from the Great Recession as investors snapped up homes and as more older Americans decided to age in place.

Some housing analysts predicted that inventory would start to climb as builders scrambled to finish more new homes. But in markets where there’s not a lot of new construction, including Hartford, Conn. and Buffalo, N.Y., inventory is hovering near historic lows, according to data crunched by Redfin and provided to TIME.

“I don’t think I’ve ever seen it this bad,” says Becky Koladis, who has been a real estate agent in Hartford for 23 years. “There’s just not a lot to choose from.”

In December, Hartford had just 1.4 months of housing supply, meaning it would take just 1.4 months to sell all the homes on the market at the current pace of demand. Hartford has had less than two months of supply since mid-2021, according to the Redfin numbers; in February 2019, by contrast, it had 5.9 months’ supply. In decades past, economists would say that a balanced housing market has between four and six months of supply, “but we haven’t seen that since the bottom of the last housing market,” says Daryl Fairweather, Redfin’s chief economist.

***********************************

No mention of significant portions of homes being used as short-term vacation rentals.

Investors now own over 25% of all homes in the US.

But no, one of the first things to blame is "seniors aging in place."

https://time.com/6261427/current-us-housing-market-inventory-low/

[Ocelot II]

1. Where does the article blame seniors aging in place?

It places the blame squarely on investors, not on seniors, which the article mentions in passing only once. And I'm one of them - they'll have to drag my old ass out of this place feet first, and my city also has a housing shortage.

[Coventina]

4. I'm probably overreacting, as I'm super sensitive about the housing situation.

But, positioning the statement so close to the beginning of the article seems to highlight it as a cause, IMHO.

Agree with you, unless I choose to relocate to a radically different part of the country (or go abroad), I am not leaving my current house. But I'm surrounded by a neighborhood that is now just little hotels, not homes.

[Bettie]

18. They have to look for a way to deflect

from the real problem: investors buying up houses to ensure that rents will never be reasonable again.

[bamagal62]

24. This is a huge problem. 👆👆👆

[Bettie]

28. There was a thread yesterday about growing numbers of homeless in

an AZ city (I don't recall which one) and it talked about rents going up 80% or so. Gee...what a mystery...why are so many people homeless? Golly, I guess we'll never know, right?

[Dustlawyer]

33. Wall Street used their bailout money from the 2008 crash to buy up distressed properties in Florida

caused by the 2010 BP oil spill.

[Celerity]

49. Foreign buyers snap up cheaper Swedish holiday homes

Sweden’s weak krona is creating a property boom for estate agents selling houses to foreign buyers who wish to settle down in the Swedish countryside.

https://www.thelocal.se/20230320/foreign-buyers-snap-up-cheaper-swedish-holiday-homes/



The best deals are to be found in Kronoberg county in the Småland region of southern Sweden, where estate agent Christer Stjernfeldt is active. “It’s practically a sale for our Danish and German, Dutch and Swiss customers. They’re seizing the opportunity too, so we’re really busy,” Stjernfeldt said.

Some three decades ago, when the krona was also low, these customers used to buy summer houses, but are today looking more for a second home where they can spend much of the year. The trend of working from home during the pandemic has made remote working easier. “It’s led to more pleasant country towns,” Stjernfeldt said. “There are more lit windows than there were 30 years ago.” Foreign buyers also benefit from the fact that the cost of buying a holiday home has gone down in Sweden, with the average price falling two percent in one year and the number of homes changing hands falling by almost a third.

In Kronoberg in particular, prices have gone down even more, estate agent Jonas Hellström said. According to insurance company Länsförsäkringar, a million kronor will buy you 67 square metres’ worth of holiday home in Kronoberg, compared with 18 square metres in Stockholm and 28 square metres in Sweden in general. “There are a lot of single-family homes which become holiday homes, as there’s not a huge difference in price,” Hellström said. “You get a lot for your money if you buy a single-family home in a town.”

Hellström described German buyers in particular, who he reaches via property site Immoscout24, as less cautious than Swedes. “They don’t hesitate, they buy,” he said, “Swedes are more cautious.” He added that German buyers aren’t as affected by high interest rates as Swedes, and that Småland has a number of other qualities popular among Germans, such as forests, lakes and a quieter atmosphere. “Swedes want to get out to the coast, but those who are used to crowds in Europe prefer the peace and quiet,” he said.

snip

[SheltieLover]

9. I have numerous foreign investors calling daily, from spoofed numbers in various states

Trying to buy (aka "steal&quot my home.

I live new Ford's new environtenmental disaster, Blue Oval City, which is now under construction. 🤮

I wish it were illegal for people to buy homes as investments. It just screws rentals & prospective home buyers.

Anything under $200k is immediately bought up. They pay cash & want 3 day closings. Pfffft.

[MissB]

17. Yeah I'm not a senior yet but I'm not moving either

Very low housing stock and most of it is frankly not as nice as what I already have. There are two homes for sale in my neighborhood (our neighborhood boundaries and the school district boundaries are essentially the same- folks buy here for the school). Two. One is over 4 mil and one is just over 1 mil.

Four houses are currently being built. I doubt the developer will sell any of them for under 1 mil. The developer is constantly on the hunt for properties that he can snap up and subdivide the land and build more houses. That’s all fine and dandy, but a lot of folks buy here for the privacy too and cramming in homes is not that fun to see.

More tax base for the school.

Dh and I will stay here until we die.

[Irish_Dem]

20. Many older people are aging in place because there is no place for them to go.

One of my cousins lives in Boston and her modest, run down home is worth several million dollars!
Crazy. Just the land is worth that amount of money. Builders knock on her door wanting her small bit of
land in a prime spot in Boston. They will knock the house down and build a new home. And make a small fortune.

She would love to sell it and get into something newer with less upkeep, etc.
But there is no place for her to go. Everything is hugely expensive and to get something she can afford
she has to go quite some distance away from Boston city. Which she does not want to do since all of
her doctors, her job and support system are there.

So she is stuck.

[pnwmom]

22. Paragraph 2, Sentence 2.

But in many U.S. markets, would-be buyers are facing a big problem: there’s just nothing to buy. Housing inventory—the number of homes on the market—has been falling since the rebound from the Great Recession as investors snapped up homes and as more older Americans decided to age in place.

[bamagal62]

26. I know 2 people right now who

Sold their homes and the buyers want a 30 day close. They are scrambling to find somewhere to go.
But, they felt they couldnt refuse the offer.

[inthewind21]

48. So

when you get an "offer you can't refuse" because the market is overinflated, where would you think you could go that is not also over inflated? And a 30 day close is not unusual.

[bamagal62]

64. True. But, they

Wanted to downsize. They assumed they could find a smaller house. Not so easy.

[Ocelot II]

32. Yes, that's the place I mentioned but it's the only reference

to seniors in the entire article, which is why I asked the question:

[appalachiablue]

35. TY

[MineralMan]

27. I think the investors were a primary cause of the

bidding wars in 2021. Now, however, in my suburb, townhomes like ours are going begging and are not getting offers. We don't care, of course, but our neighbor next door wants to move to Tennessee and had to take his place off the market last fall. They're going to try again this spring. We'll see. Problem is that townhomes like ours are at the bottom of the market, and first-time buyers can't handle the interest costs. Unless someone like us is moving from a home on a lot to an HOA property, there aren't any buyers, apparently.

We're very happy with our purchase, but it's really hard with those entry-level homes for first-timers. Since our HOA doesn't allow owners to rent out their homes, that squashes any buys by investors.

[inthewind21]

47. It doesn't.

Not even close.

[2naSalit]

2. Buy?

Hell, there's nothing to rent!

[Casady1]

3. This goes back to the 2.5% mortgage rates

As soon as that happened the market dried up. People who refinanced at 2.5% made a decision to stay in their house for the foreseeable future. People used to move every 5-7 years and now no one is selling thus no inventory.

[phylny]

63. Exactly.

Everyone in my family has a very low mortgage interest rate. There’s no sense in selling a house and then buying some thing wonky to double your interest rate.

[LetMyPeopleVote]

5. I am getting calls from realtors trying to buy my house or the lot where owned by my oldest

My oldest is building a new home and will move into the new home this month. I am getting calls daily tryng to buy my home or his lot (the tax records do not yet show the new construction). It is annoying

[LiberalFighter]

6. I get them too and they sound foreign.

Would like to reach out to them and experiment on them.

[SheltieLover]

10. Same here. Numerous calls per day from foreign investors.

[Irish_Dem]

21. I keep getting calls from Honda sales people wanting to buy my 2019 Cr-V.

Other relatives keep getting calls to sell their homes.

We aren't even dead yet and everyone is after our assets.

[Amishman]

60. It's scam / exploitation attempts

It doesn't exclusively target seniors, but the primary target is that group.

Those that aren't outright scams are still shady. Seniors are less likely to realize the current strength of prices in real estate or relatively recent (and especially low mileage) vehicles. The owner is tricked into selling at what feels like a good price to them based on more familiar prices of a few years ago, but really they get ripped off.

[Irish_Dem]

61. The salesman/dealership/service dealers are the ones who call me.

They are legit, but yes I think they are hoping I don't know what my car is worth.
Yes it is in excellent condition with very low milage.

I am smart/intact enough to realize what is happening.
But some older folks are not in good enough shape to understand the situation.

[Hugh_Lebowski]

7. To be fair, the authors literally mentioned Investors before Seniors

"as investors snapped up homes and as more older Americans decided to age in place."

Just sayin

I think this issue, to the extent it is one (which like most things could be debated from many angles) comes down to things like opposition to development in various areas, people not wanting to move because they have way better interest rates than they would if they DID move, rental prices also being sky-high, and building supplies still having relatively high prices, like they did during COVID.

Also developers depend on loans and the interest rates for them are every bit as important as they are to home buyers.

There's a lot to unpack with a matter like this.

[mathematic]

8. People across the political spectrum and also non-partisan vote against housing construction

For decades there was always an excuse to not build housing in cities. Thankfully that has begun to change. Multi-unit housing construction is the highest it's been since the 80s. It's going to take many years of permissive building policy to undo the lack of building (in cities) since the 90s.

[GoCubsGo]

11. What are those "investors" doing with those homes?

Are there THAT many Air BnB's out there? And, are they actually making their owners that much money?

[MissB]

19. In our neighborhood

There is a developer (probably more, but one guy in particular seems good at snapping up homes) that buys an older home, looks at tearing it down and replacing it either with a bigger one or subdividing the land and building in a greater density. In one case he kept the existing home and divided the land so that none of the homes will have much of a yard but there will be 3 homes where only one once stood.

Problem is the homes he’s building are all super expensive. Minimum 1 mil. One of them is listed for over 3.2 mil and it’s not finished yet - set back maybe 20 feet from the street with zero lot. But a huge modern (and ugly) home.

Zero AirBNBs in the neighborhood. Just single fam homes.

[Mosby]

39. It a way for rich people to park some money

And live the western life:

David Yin and his Chinese clients are in a race against time. The Chinese-Canadian realtor has a few weeks left before a looming deadline hits in the new year: Canada’s ban on foreign home buyers.

“My clients need to complete their sales [in] December,” Yin, who works with Sutton Coast West Coast Realty, explains. The new law, which comes into effect on January 1, 2023 — will prohibit non-Canadians from purchasing domestic property over the next two years.

The controversial ban comes into place as part of the Canadian government-led measures to “cool down” overheated housing markets in cities like Vancouver — which currently ranks as the third most unaffordable city for housing in the world, behind Hong Kong and Sydney.

“One of my mainland China-based clients came here to buy a place so their kids could attend primary school in Vancouver,” says Yin.

http://jingdaily.com/what-canadas-ban-on-foreign-home-buyers-means-for-chinas-emigrants-pursuit-of-the-vancouver-dream/

One-Third Of Vancouver’s Real Estate Market Is Owned By Chinese Buyers

https://www.fortunebuilders.com/one-third-of-vancouvers-real-estate-market-is-owned-by-chinese-buyers/

[inthewind21]

51. They are

renting them. They have the $$ to pay cash, outbid and close earlier than anyone by waiving all inspections and buying site unseen. Not too far down the road from me is an brand spanking new community of 95 homes 1300 - 1800 sq ft 2 car garage with a decent lot that are ALL rentals owned by an investment firm. Rent starts at 2500.00 and going up from there. In turn, EVERYONE around them, including my condo complex jacked up rent 200-400 per month (depending on the regular vs luxury complexes) , and I quote, be more in line with market value. 1100 sq ft condo with a 1 car garage that is not luxury by any stretch but nice enough went from 1400.00 per month for a 2 bed 2 bath to 2200.00 per month in the span of a year and a half and now billed as "luxury living".

[padfun]

12. I'm one of those seniors in place with a low interest rate.

I have a 4 bedroom 3.1-bathroom house on a quarter acre in California. Zillow has my house at 460,000 so when I get those calls, I tell them I will sell for 3.1 million and not a cent less.

My payments plus water, trash and sewer is about 1,500 and you can't find a two-bedroom apartment for that price around here.

I'm Staying put!

[roamer65]

13. Time for another housing bubble!!

[lame54]

14. A house on our street...

Sold in a week for 30 over asking

[Quixote1818]

15. I'm constantly getting text messages with offers to buy my house that is not for sale

Would that fall into this BS?

[hamsterjill]

16. Man, we are feeling it seriously!

My family is finally in a position to be able to move from a worn out, falling down piece of crap house in the city and have been looking to buy a small place in the suburbs. I have a cat rescue and my dream is to have a place where I can put all of the cats together. Some are in managed colonies and some are in foster homes. I want to have a place to pull them all in and have everyone safe, etc. Build a big cat enclosure and have a lot of enrichment things for them. I’ve been saving and hoping for years. And now this!!!

We can’t find a damn thing that is workable. It’s been so depressing. Our realtor literally calls us to say “I have nothing to show you”.

Please send DU good vibes that things change soon!!

[housecat]

29. What a wonderful goal! Of course we wish you luck. Have you considered other location options?

Partnering with an organization?

[hamsterjill]

36. Thank you.

I have a 501(c)(3) nonprofit for the cat rescue. The property purchase will be for our family to live on, so we will purchase it.

It’s just disheartening because (1) I never thought I’d ever really save enough money to be able to do this, and (2) now that I have scrimped and saved, I can’t find anything.

We have looked at a 360-degree radius around the city we live in. We need to stay within that space for our own needs, the cat vet, shopping, etc.

One of these days!!!

[Sky Jewels]

30. Oh, thank you so much for helping kitties!!!

I hope you can procure a property for them all one day!!! Sending big cat person vibes your way.

[hamsterjill]

38. Thank you.

Been doing rescue for thirty-plus years. It’s the highest high and the lowest low. I’m at an age where I need to stop intake, and I’ve pretty much done that. I need to outlive the remaining cats.

But I would love to have them all in a safe and secure place to let them live out their lives in peace.

[LeftinOH]

23. I sold my house and moved two years ago - and I am still

inundated with offers to buy my (old) house. Mailers, emails, texts, voice messages. They're vultures.

[MineralMan]

25. It's more than one thing, I think.

My wife and I bought our townhouse in June of 2021. Our immediate neighbor tried to sell his for the same price during the late summer of 2022. When we bought, it was almost impossible to find what we were looking for and you absolutely had to bid above asking price. When the neighbors tried to sell, they only got offers under what they wanted.

Interest rates had started to go up again, I guess. Anyhow the neighbors took theirs off the market and are planning to try again this spring. Trouble is, interest rates are above 6% for very well-qualified borrowers, and the townhouses are not a hot commodity right now. I think they missed their timing by about a year.

It will be interesting to see what happens.

[TygrBright]

31. Some of us seniors can't afford anything else.

We would happily swap our 2-story, 4-bedroom home the two of us are rattling around in, for something smaller and one-story.

You would think, wouldn't you, that if we sold this house, we'd have way more than we needed to buy something half the size.

Nope.

We can't AFFORD to move. Right now our mortgage payment, escrow, and utilities combined are about 1/2 to 1/3 what it would cost us to pay the mortgage, escrow and utilities on a house HALF THE SIZE.

We're stuck where we are.

wearily,
Bright

[Raftergirl]

34. There are practically no homes for sale in my suburban town.

I’m definitely not going anywhere. I have a mortgage at 2.35% and my monthly payment is $800. We remodeled this home from top to bottom and it is now my dream home ,put in over $200k to do everything we wanted. We have owned it for over 30 years and original mortgage was 12%ish. One floor so it’s the perfect house to age in place.

When homes come on the market in the next few months (my areas biggest selling season) I anticipate they will be sold in days. Great town with a great school district. I don’t anticipate it being a buyers market here, even with higher mortgage rates.,Too many people want to move to my town.

[pinkstarburst]

37. Maybe instead of going after Tiktok

they should do something about foreign investors (who are often Chinese) buying up real estate. This isn't just an issue with it causing housing prices and rent to rise. They have also been buying up agricultural land for grazing and farming, too, which shouldn't be allowed. I'm far more concerned about that, and about foreign investors owning so many homes in the US, pricing out US citizens, than I am about TikTok.

[OnionPatch]

40. I searched for a year for a house

There was nothing on the market in my price range, let alone anything I actually wanted. I put a bid on a home and was overbid by 20K. And I was looking in a more rural area. I had already sold my home and was desperate, so I found a way to buy a lot and put a small modular home on it. At least I didn't have to get in a bidding war for that. As for aging in place, I just retired and I'm not going anywhere until they carry me out on a stretcher.

[AllaN01Bear]

41. land mafia at it again and out of control.

[Roland99]

42. I was looking to sell and move to a new development 1/2 mil away....

Not gonna happen now as rates have double from where they were in the last few years.

I'm sure there are quite a few like me in this situation. Can sell my house for well over twice what I paid for it but then were the heck am I gonna go?

[2naSalit]

43. I'm trapped in a cardboard box...

That is already at its half-life, 5yrs, and I will be needing to find a place to age at home as well. There is nothing in my price range if there was anything. I can't keep moving around.

There's nothing in rural areas either.

[IronLionZion]

44. There are investors buying rentals of all types

short term rentals offer more income for them than long term rentals but it's also more volatile. COVID screwed up some of that when people stopped traveling for a bit and then came roaring back.

US tax policy favors people who live in their homes rather than rent it out. But there are fabulously wealthy folks who don't care about that. They are parking their cash in real estate because it's providing better returns than other investments these days.

I like the articles that blame millennials for killing everything including home ownership. Do millennials even live?

I'm looking to move and it's absolutely insane now. Prices are high for places that are not that great, and they still sell within days of being listed. My neighborhood has a lot of shootings and sirens as a selling point, if anyone is into that

[Old Crank]

45. Where is the line drawn

Between an investor and a person who invests in a house to rent out?

One big problem has been the decades long description of the house you buy is an investment and not talked about as housing per se.

[Quanto Magnus]

53. In the SF Bay Area

there are a lot of empty properties owned by foreign money. That's definitely part of the problem here and that would definitely be more of an investor. The empty property will actually make them money over the long haul. And typically these people are buying a lot of properties. They might rent a couple out, but keeping empty units mean more demand for units that are available.

I don't think our 'investor problem' is the person who buys 1 or 2 or 3 properties, it's more the one's who are buying 15, 20+ in a locale. And playing games with availability.

[inthewind21]

54. Bingo

Inever looked at my house as an "investment". It was my home.

[Ilsa]

46. I live in a big house with two people.

People ask if I'm planning on moving, and I have to ask why? My home is paid for, and any other place will cost as much and be smaller. Moving makes no sense. They'll have to carry me out, too.

[OnlinePoker]

50. We're wanting to sell and downsize to a house with only one floor.

They just don't make them anymore (unless you want a strata development in a gated community). Everything on the market is a house about our size or 3 and 4 story townhouses. We want a house where we don't have to navigate stairs either to get into the house or get from the bedroom to the laundry.

[onetexan]

52. i live in a major metro area & home prices are falling

But property taxes are what's driving higher rents. Landlords have to pay much higher taxes & in turn end up passing them to tenants since it badly curs into their profits.

[RamblingRose]

55. Equity firms.

The Atlanta-Journal Constitution did a great piece on the housing crisis. Definitely worth the read but I think it's behind a paywall. Of course the GA legislature did nothing this session to help solve the problem.

Private equity firms like Blackstone Group (Invitation Homes), Pretium Partners (Progress Residential) and Amherst (Main Street Renewal) convinced public pension funds and other large institutional investors to bankroll their homebuying sprees.

In 2011, no one company owned 1,000 homes in the entire country, a Congressional review found. Today, 11 firms own more than 1,000 in the Atlanta area alone, an Atlanta Journal-Constitution investigation found. And five companies own more than 280,000 single-family homes nationwide combined, according to the Congressional review.

In 2019, Blackstone sold its remaining stake in Invitation Homes for $1.7 billion. But the private equity giant, which has $975 billion in assets, hasn’t left single-family rentals behind. In 2020, it invested $395 million in the Canadian firm Tricon Residential, Atlanta’s fourth-largest homeowner. A year later, it bought Home Partners of America, Atlanta’s eighth-largest, for $6 billion.

Few of their homes are affordable for most renters.

https://www.ajc.com/american-dream/why-companies-buying-up-atlanta-houses/

[jmowreader]

56. I get at least one letter a week from realtors

“Would you be interested in selling your home to one of my investors?”

or

“I have a family from California interested in buying your home. Would you be interested in selling it to them?”

No. No, I would not. This neighborhood does NOT need any unlicensed hotels in it, and we have far too many California right-wingers up here already.

[louis-t]

57. It's largely because investors have bought millions of homes.

Some do flip them and give us viable homes to sell, but I see most of them renting the properties. In the Real Estate business 30 years. The other reason is over 20 years ago, builders stopped building in the median price range. In my area, that means $200,000 to $400,000 currently. They are building only $400,000 and up. That leaves 40 people trying to buy one home in the $200,000 range.

[Farmer-Rick]

58. I have to wonder if all those dilapidated houses

Left behind in the 2008 crash that crumbled into heaps didn't add to the housing shortage? I see them around here in my rural TN area everywhere. There are at least 5 I pass on my way to town. They usually are on the edge of a rural road with little to no land with them. There use to be more but several have been bulldozed over and buried.

About 4 years ago, I thought of selling my farm and moving to a nice apartment in the city. But the apartments were asking rents that we almost double my mortgage payment for half the space and no land.

[Warpy]

59. It is cheaper to keep seniors in their own homes for as long as possible

than it is to move them anywhere else. Seniors who can still manage to do so have stayed in their homes, or have downsized to smaller houses once their children have gone and that's what seniors have always done. It's how they are able to leave something to their children when they die, the house is generally their biggest asset.

The problem is the investment bankers and other vultures who have come in and snapped up any available houses to hold off the market until appreciation gives them fast profit or something else to leverage for faster profit. What they won't be is on the market for people who need someplace to live.

[Xolodno]

62. It's a multi pronged problem.

Cheap cost of money created a run to buy and others to refinance and stay put.

Some homes from the 2008 crash (even brand new) were just up and bulldozed.

Covid allowed more people to work remotely, so they moved. Upending a way for predictable growth.

And yes, speculators really screwed things up. Driving up the price and then flipping it. This problem was never fixed during the 2008 crash. Now that interest rates have gone up, some areas can't be resold. So they sit on them and since they don't want to have long term renters, Airbnb, VRBO, etc. Hell, some even rent out the pool during the hot summer.

Wildfires. They take out communities, problem is, new zoning laws, fire containment rules, etc. often results in less homes being rebuilt. One gets theirs rebuilt, another has to take the money and go elsewhere.

And of course there is a rental property shortage as well. Landlords short term renting units (for Airbnb) even in places where cities have made laws to discourage it. Problem is, its very difficult to enforce. But I think the market on that might have a small correction.

More and more are complaining they are not getting the rental income they used to. Well, no shit sherlock, when you got an apartment that's double of a nice hotel room, have a huge cleaning fee (and demand that you clean it before leaving), people are more likely to hit the hotel with a pool. But they can be a stubborn lot, so it may be awhile. They think they can weather it and another landlord will give in to a long term rental.

[walkingman]

66. Welcome to DU - glad to see you here!! Have fun 👍