Housing Shortage

Hello! David J here again bringing you more of the steps on my journey toward financial independence.


Well! It's been a while, hasn't it? Hope everyone has been working diligently on their real estate business, studying their classes ... taking those actions that lead us to our goals!

While we've all been busy, something surprising has been happening: the housing market has taken an interesting turn.

See, after the economy went down, almost all but the largest homebuilders went under as well. Thousands and thousands of contractors found themselves idle. Building supply vendors felt it, as well. Some analysts estimate that we're short some 5.5 million housing units from where we need to be just to meet the current demand.

...but, during the time since then, what didn't happen? Homebuyers didn't stop entering the market, did they? Folks were graduating college, looking to move away after school, they even went ahead and started their families while waiting for the housing and home finance market ships to right themselves. Some folks changed jobs or just decided they need a different home for any of many reasons.

Now, the economy is sputtering back to life, and home values are rising slowly. Mortgage lending is still tenuous, as best, but at least some lenders are beginning to "go back into business". Banks are flush with cash to lend, yet lending criteria remain so tight that qualifying for a home loan still remains the holy grail of the 75% of credit holders who are now considered to have "bad" credit (that number was 57% before Springtime of 2009: the banksters did it TO THEMSELVES!)

In this climate, we're seeing something we've not seen for years now: multiple offers on available homes, offers above the asking price, ... Yes! Bidding wars in some places!

The dearth of lending is still keeping home prices supressed by artificially dampening demand. So, the run-away increase in home prices we saw in the years leading up to 2007 haven't materialized yet. People have less cash available for down payments, lay-offs and other challenges have raised issues with peoples' credit, ... in short, the environment is very different from what it was, and yet very different from what it should be.

By rights, the dearth of housing should be pushing prices skyward, yet the weakness in the lending world keeps a lid on demand for both existing and newly built homes.

Some of my Facebook friends have posted that homes they find via the MLS on Realtor.com and other sites are often sold by the time the listings appear on line.

So, homeseekers, if you've also been a job seeker recently you'll need to apply those same networking skills to your home search, just as you did in your job search.

Where can you go to network your way into a new home? Well, there are some options you'll want to consider.

One might be to find the monthly meetings of the local REIA (Real Estate Investor Association) clubs in your area. Investors have been buying bank-owned homes as well as short sales. They've been rehabbing them and putting them back on the market, often without listing them with a broker or agent. The best shot you've got is to find homes before anyone else does and get first crack at making an offer on something that you like, especially if you find it before it gets listed on the MLS.

If you've been following my blog, you may know that the investor group I'm with meets weekly, every Thursday evening and holds a monthly workshop - GREAT opportunity to learn stuff you may not hear anyplace else, and also to network with active real estate investors over lunch. You may even find someone with a home for sale in your target area that no one else has heard about yet!

Speaking of classes, I hooked the laptop up to the big screen TV. Now, I can watch my classes in my recliner with a Pepsi handy and my notebook in my lap. Great stuff!

I'll keep my ear to ground and report back when something good comes along! LOTS of great stuff coming this summer, so we'll be back in touch more often.

We'll talk again soon!

Take care - be well!

Much Success!