Housing Inventory and Growth Report - Summer 2022

Here is a brief look at housing inventory and growth from Summer 2022.

The housing market has seen record growth over the last two years. However, current data is showing signs that inventory may be slowing down. In recent weeks there has most definitely been a decline in new listings. So, what does this mean for real estate investors?

The Why

The slow in inventory growth could be a supply and demand issue caused by the increase in mortgage rates. Higher mortgage rates make it harder for buyers to afford homes, resulting in a decrease in demand. This is causing fewer sellers to list their homes, triggering less available inventory.

Inflation is likely impacting the slowdown of inventory as well. Inflation means money isn’t going as far and people are unable to come up with a large enough down payment to borrow money. This decreases the buyer pool and increases the population of renters entering the market.

There is a large lack of predictability with regards to mortgage rates and inflation, leaving buyers and sellers uneasy. Many people are choosing to wait and resort to renting in the meantime.

Slow Growth Is Still Growth

It’s important for investors not to get discouraged by a slow down in inventory. In fact, this could be very advantageous for investors that are willing to practice patience. The recent hot, frenetic market was a great time for investors to make fast money, but any experienced investor knows that that type of market was not sustainable. Inventory is slowing down to normal levels, which means opportunities still exist, but investors will need to allow for more time to experience typical returns. Inflation means home prices are rising and properties are appreciating, therefore, renting and holding onto a property can provide slower, but excellent returns.

Seasoned investors should be reminded that real estate can be used as a hedge against inflation, specifically with single family rentals. In this particular market, as rents rise along with inflation, the cash flow for property owners increases making single family rentals a great option for investors. Similarly, the rise in mortgage rates will increase the demand for rentals as buyers get forced out by lack of affordability. Even in this fluctuating market, single family rentals prove to be a relatively safe investment.

Regardless of how you choose to invest in today’s market, opportunities still exist. Keeping up with trends and data can help you determine the right investment for you, even in a rather unpredictable market. Connect with an industry expert from CALCAP Lending to discuss your options for financing!

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About CALCAP Lending

A division of CALCAP Advisors, CALCAP Lending benefits from the expertise of a seasoned team of professionals with extensive, successful track-records covering a variety of disciplines and leading large, nationally-recognized institutions. A private money direct lender, CALCAP Lending provides short to mid-term financing for property investors and businesses looking to purchase, refinance, renovate, and construct residential or commercial properties.

Lending FAQs

You've got questions, we've got answers.

What is private money lending?

Private money lending is a collateral-based lending strategy that is often associated with shorter terms and more attractive features. A private money loan offers more flexibility than a conventional mortgage or bank loan.

How does a private money loan work?

Private money lenders provide financing using money from private entities. Private money loans often work as bridges to help investors gather funds to achieve their short term real estate goals, but long term, permanent options may also provide.

Why would I choose a private money lender?

There are many advantages to using a private money lender for your real estate investments! Private money lenders can be more lenient when it comes to borrower credit issues, often there are no prepayment penalties, you can leverage your cash to buy multiple properties, and private money loans are quicker when compared with institutional loans.

Can I get prequalified for a loan?

CALCAP has a responsive loan team who are able to prequalify you. Contact a loan specialist at 833.816.5580 to get started.

How long does the lending process take?

Private money lending can be a quick and painless process. From start to finish, 30 days is common, however, turn around times can be as short as 10 business days.

Can I still be approved for a loan if I have bad credit?

Generally yes, we understand that people have temporary financial issues that come up, and we want to work with you to help you rise up financially to a better place. Offsets to credit concerns may include experience as a real estate investor, good cash reserves, and/or larger down payments.

I am a broker or investor, how can I work with CALCAP?

Business is built on relationships. Ours is no different. CALCAP Value and Preferred Partners receive exclusive rates and services. For more details and to submit your application, visit our partners page.

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