On Foxnews.com this morning there was an article that alerted me of a Tidal Wave of Properties that were going to start popping up on the market: https://www.foxnews.com/lifest...
Essentially, what they are alerting to is the fact that as Baby Boomers pass away, they are leaving behind their homes, vacation homes, etc..
They expect more than double the properties that came on over the past 10 years to come onto the market.
I know a lot of Biggerpockets members see this as opportunity, but question is who is going to fill that void, both financially and physically? Is the population really going to increase by that amount to fill the void of vacancies that are going to pop onto the market over the next 10 years? I don't think so.
So, 3 questions BiggePocket Members:
What happens to the real estate market over the next 10 years. Boom? Bust? or Stay the Same?
Will the increase of properties on the market, bring more Millenials to home Ownership?
Does the rental market get soft as they flood to cheaper properties that make it onto the market?
And a 4th Bonus Question: How does this flood of properties change your real estate investment strategy?
I don't know that anyone can predict the housing market 10 years from now. Housing, along with climate change, is one of the primary issues in the spotlight and "big brother" is working really hard to make it look like they know how to fix it and pedaling a bunch of ludicrous ideas that sound good to those who have no understanding of large scale economics and real estate, but in reality are only going to make things more convoluted. We'll have to see how things play out to get an idea of how the market shifts will play out.
Specifically to this question of inventory, there is a definite housing shortage so an increase in inventory isn't a bad thing and may help to stabilize the market or sway it back to the buyers side. Hedge funds are becoming a much bigger playing and gobbling up mass quantities of real estate, including SFR, and this could serve as an opportunity for them to buy larger portfolios. If these properties are bid up by institutional investors then I don't see the rental market softening much because it will keep the prices up and supply down.
In regards to millennials, I think there are two main issues 1) they can't come up with down payments because they have more debt and (in general) aren't very financially educated and thus save less, 2) they grew up during the Great Recession and have a stigma about housing as an unsafe investment so many will want to be renters for life. If housing supply does in fact increase then it could soften asset prices enough to overcome some of the burdens of the down payment, but it likely wouldn't affect the association many have with houses being unsafe investments. I'll be curious to learn from others viewpoints as well.
@Scott - Interesting point.... particularly in regards to the hedge funds. I wonder though, if they can keep up with the supply, and IF the real estate market softens, if the Real Estate Hedge Funds will start to tank and lose investors... thus slowing their investments in the Single Family market... chain reaction or perfect storm?