Quote:
Originally Posted by thinkxingu
The author also believes that vacation areas will be hit, too, but says the overall decline could be a positive thing as it will open up more buying opportunities in a very thin housing market.
As I mentioned above, I'm all for pulling homes out of investor/STR hands and putting them in the hands of committed owners/families. I think it's clear that that makes for better neighbors and neighborhoods.
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So many homes disappeared from the housing market as various investors/LLCs/etc were offering above asking, and in many cases, offering cash. It's difficult for a home-buyer to compete with that. One such home in my neighborhood went for well above market price - $505,000 - in a neighborhood that was seeing other similar homes going for ~$300K. The buyers owned a number of STRs all around the Lakes Region and this was just another acquisition. They get ~$2600/week for that property, a home that is identical to mine in layout and size. Even if they only rent it out 20 weeks a year that's $52,000 a year. It would take about 9-1/2 years to get their investment back. (I am using 20 weeks because that's how many weeks they've been able to rent their STR over the past year.)
How many properties like that have had to cut their prices to get any bookings at all? How many with mortgages are able to make their payments if their bookings are weak?
I expect quite a few in my town are likely to go on the market within a year and for less then they paid for them.