Housing inventory is drying up quicker than a puddle of water in the desert, which is boosting confidence in the market and enticing investors. In particular, Southern California is experiencing a sharp decrease in the amount of homes for sale.
According to Redfin, the number of homes listed for sale in Los Angeles County dropped by 35% in April, and other parts of Southern California are following suit. Inventory fell by 42% in Orange County, 42% in Riverside, 39% in San Bernardino, 43% in San Diego, and 53% in Ventura.
Decreased inventory means one thing: Increased prices. With interest rates at record lows, a plethora of buyers are re-entering the market only to find a shortage of supply. This is forcing homebuyers to bid higher if they want to secure the home of their dreams.
For investors, the housing inventory shortage means big returns in a relatively short amount of time. Fix and flip investors can scoop up distressed properties that most buyers would run from, make a few improvements, then put the homes back on the market.
We predict housing inventory numbers to continue to decrease and home values to continue to rise. Since the much-anticipated foreclosure wave didn’t materialize after all, the sun is shining on the U.S. housing market.
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