It’s been a rough couple of months for anyone looking for deals—particularly on the MLS. People just haven’t been selling their houses. It makes sense that inventory is low. With all the uncertainty about the economy, people are using their homes more than ever. Plus, who wants strangers walking around in their lockdown palace?
Is the housing market going to cool down?
According to data provided by the Federal Reserve, inventory bottomed out nationally in October, hitting levels we haven’t seen since 2004. This has led to one heck of a seller’s market over the last couple of months. An agent friend of mine recently told me a place in Denver he was bidding on for a client went for $76,000 over asking. Whoa.
As of February 2021, things may be changing. That month’s supply index for homes in the U.S., jumped up to 4.8, which is the highest level we’ve seen May of 2020. For reference, the average for the four years leading up to the COVID-19 pandemic was 5.6—we’re coming back!
For more in-depth housing market analysis, check out Will the Housing Market Cool in 2021? There, I discuss:
- What will happen to the housing market if inventory increases?
- How to interpret recent news from the Bureau of Labor Statistics.
What is BPInsights?
Successful investing requires accurate, easy-to-understand information about your properties and the markets you invest in. BPInsights is an exclusive feature for BiggerPockets Pro members that offers a deeper dive into the real estate market. Here’s what BPInsights offers:
- Fresh and unique data. We licensed data from the industry’s top providers to ensure BiggerPockets Pro and Premium members have access to every change in the market, as it happens.
- Property Insights tool. Whether you’re analyzing a new investment or ensuring your current properties are appropriately priced, Property Insights delivers accurate comps to inform your strategy.
- In-depth analysis. Our team of expert real estate investors and analysts break down market trends to help you digest crucial information so you can better manage your investing.
- Proprietary spreadsheets. Download spreadsheets produced by the BPInsights team so you can personalize the data and conduct your own analysis.
Take an investing deep dive
Want more in-depth analyses like this from Dave? Successful investing requires accurate, easy-to-understand information about your properties and the markets you invest in. BPInsights gives you the information you need to find your next great deal and maximize your current investments.
Which cities saw the biggest rent decreases in 2020?
From buzzy restaurants and tightly packed bars to live concerts and giant sporting events, nearly every attraction that makes big city living worth the sizable rent has been basically nonexistent since COVID-19 shut down in-person gatherings.
In notoriously expensive cities like New York City, Los Angeles, and San Francisco, where one-bedroom apartments were going for more than $3,500 a month in some neighborhoods before the pandemic struck, many of the young professionals who were paying so much to live close to the office have taken the term “remote work” literally, packing up for faraway destinations in the Sun Belt or even just the nearby ‘burbs.
In 37 of the largest 100 counties in the United States, rents for one-bedroom apartments were falling year-over-year, according to a recent Realtor.com report.
From infamously pricey big cities to tech hubs and major tourism centers, here’s where rents have dropped the most since the start of the novel coronavirus pandemic.
To learn more about why rents declined in these locations, check out Where Did Rents Decline the Most in 2020? on BPInsights.
What is inflation—and how does it affect real estate?
Inflation plays an important role in the economy. With unprecedented levels of government stimulus over the last few months, fears of inflation are surfacing after years of stability. What does this mean for your real estate career? What does it mean for you?
Inflation might not be the sexiest topic, but it is an important concept for real estate investors to understand. Real estate is generally considered one of the best ways to hedge against inflation risk, and understanding inflation will help you manage potential concerns and better understand one of the fundamental forces in our economy.
Not inflation-savvy (yet)? In How Does Inflation Affect Real Estate?, I explain:
- What inflation is—and what happens when it rises
- Why economists are talking about inflation today
- The interplay between real estate and inflation… and why investors shouldn’t be that worried.
Ready to upgrade to BiggerPockets Pro and access all this great content—and more? Start your membership for just $39 per month.