Friday, February 26, 2021

NY Times Upshot: "Where Have All the Houses Gone?"

by Calculated Risk on 2/26/2021 12:51:00 PM

This is an excellent article by Emily Badger and Quoctrung Bui in the NY Times: Where Have All the Houses Gone?  The authors discuss many of the issues we've discussed on why housing inventory is so low (pandemic, people renting homes, baby boomers aging in place, etc).

A brief excerpt on the conversion of single family homes to rental properties:

“Right now it’s a screaming good deal to have two properties: When my mortgage rate is 2.7 percent, why not have two of them?” said Michael Simonsen, the C.E.O. of Altos Research. “It took a long time, I think, to realize that that’s what was going on.”

Over the past decade, he points out, the number of single-family homes in the rental market grew by more than seven million. And the vast majority of those are owned by individuals, not big institutional investors. Other opportunities to make revenue off investment properties have also boomed with the rise of companies like Airbnb.
In 2015, housing economist Tom Lawler estimated there were 17.5 million renter occupied single family homes in the U.S., up from 10.7 million in 2000. Many of these houses were purchased by investors. Most of these rental conversions were at the lower end, and that limited the supply for first time buyers.