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Are Investors Really Facing a Housing Inventory Shortage?

With an estimated 800,000 distressed properties slated to hit the market, are real estate investors really suffering from a housing inventory shortage?

Some real estate investors and media outlets continue to gripe about an alleged housing inventory shortage. The lack of inventory has seemingly made the market more competitive. Yet, with billions in distressed mortgage debt, experts are predicting the housing inventory shortage to ease.

Real estate investors have certainly been spoiled with massive spreads over the last few years. Many are still finding incredible bargains every day. And now, RealtyTrac has recently acknowledged that there are some 800k homes likely to come on the market in the near future. Using a new modeling system, the firm predicts that a giant wave of struggling homeowners will soon list their homes as highly motivated sellers, or will at least be receptive to offers.

Also, realize that there are still many properties already in foreclosure that haven’t been publicly marketed yet. Some are sitting on banks books as shadow inventory while others are just now being foreclosed on. Furthermore, large scale re-defaults on loan modifications indicate many more are on the way.

In some areas, the spike in new foreclosures is providing more than enough opportunities for would-be investors.

Using a combination of social networks to connect with higher level bank and mortgage service professionals, investors should find plenty of inventory to work with. Whether wholesaling or fixing and flipping, it’s pretty obvious that reasonably priced  homes can be resold quickly to a wide variety of end buyers.

 

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