Odd Lots Inventory Vanishing and Bidding Wars Exploding in Crazy U.S. Housing Market
Jan 20, 2022
Mike Simonsen, the CEO and founder of Altos Research, sheds light on the current U.S. housing market's chaos. He explains the alarming trends of disappearing inventory and soaring bidding wars. As supply chain disruptions fuel inflation, buyers are increasingly competing for homes. Simonsen highlights how cash offers can be outbid by mortgage users due to low rates, revealing a surprising dynamic. He also discusses the impact of rising interest rates and the role of individual investors in this intense market.
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Housing Market Frenzy
- The US housing market is experiencing record low inventory, high demand, and intense bidding wars.
- This is driven by a decade-long decline in inventory, a booming economy, cheap money, and millennial demographics.
Declining Inventory
- Low interest rates incentivize homeowners to keep their previous homes as rentals when they move.
- This, combined with institutional investment, has removed millions of homes from the resale market.
Wealth Advantage
- People with strong balance sheets have a significant advantage in the current housing market.
- This is partly due to the fact that they can carry multiple homes.