USA Real Estate update
How could we have a shortage of inventory at this juncture? Investor demand along with population growth and rising household formulation have all combined to remove excess inventory. Combine these factors with the fact that those who owe more than their homes are worth are reticent to sell. Even those who were foreclosed upon are starting to purchase again or need single family homes to rent. The question is not why is the inventory down, but will the lower inventory slow down the real estate market in the coming year?
You can’t have rising home sales with not enough homes for sale. We think that two factors will increase inventory in the coming year. Rising home prices will encourage more home owners to list their homes. And builders can create inventory by building more homes. Increased building activity is expected to help pump up the economy in the coming year. If real estate demand continues to rise, expect banks to accelerate the process to get rid of homes in their inventory. In other words, we are expecting the low inventory “problem” to be self-correcting during the year — unless new demand outstrips this additional supply.
Single family home tenants are 18 % more likely than apartment tenants to stay in their current homes five years or longer, suggesting that demand for single family homes, the fastest growing rental category, will be more stable than multifamily demand, according to a new national opinion survey released by ORC International for Premier Property Management. Twenty-six percent of single family tenant plans to stay in place five years or more, compared to one out of five apartment dwellers (22 %). Founded in 1938, ORC International is a leading global market research firm and since 2007 has conducted the CNN|ORC International poll.
One factor contributing to single family stability could be high marks renters give the quality of single family property management. Some 80 % of tenants in single family rentals said their property management was good or excellent compared to only 63 % of apartment renters One out of four apartment dwellers (26%) rated their management as only adequate.
Single family rentals can be found in virtually every community today and more and more families are choosing single family rentals either as a temporary stop on the road to becoming homeowners or as a permanent solution to their housing needs. Over half, of renters, said they anticipate becoming homeowners in the next five years. The near term interest in becoming homeowners among single family tenants reflects the new roles single family rentals are fulfilling as a stepping stone to homeownership for first-time buyers and as a sanctuary for large numbers of families displaced by foreclosures but who plan to buy again when they can afford to do so.
Fifty percent of Americans say they expect the housing market to improve in 2013, while 16 percent say they expect it to get worse, according to a Bloomberg National Poll of 1,003 adults. What’s more, the majority of the Americans surveyed said they have big hopes that the improvement in the housing market will also help give a boost to the overall economy. More Americans are expressing optimism about the trajectory of home prices too.