Anecdotally, most of us feel the pinch. Home buyers (including investors) skipping inspections in order to compete for homes.
Many of us are attempting to adjust by offering other services such as “walk n talks”, Radon testing, mold testing, sewer inspections etc.
There are many indicators this problem is here to stay. Housing shortages and increased investor competition has many experts forecasting a long term issue.
I am interested in how you all will be adjusting your business plan.
These are local articles however I believe the issues discussed here are duplicating across the country
I am seeing it here on the Florida Gulf Coast. I am in a secondary and vacation housing market this year has not started out the best.
I feel that this is a trend that will be around for a while and I am also trying to adjust my business plan and marketing.
Any suggestions or insight would be great.
For me, I see all the mid level entry homes being scooped up by investors. This forces the retail customer out of the market or forces them to skip the inspection.
I’m considering moving into higher end niche market.
This housing bubble will start to burst when the institutional investors, most conspicuously Blackrock and Vanguard, finally realize that their greed is doing such financial harm to their renters that the renters can no longer afford the unreasonable monthly rent payments. Late payments, broken leases, higher vacancy rates, and damaged premises are the ultimate rewards for price-gougers and slumlords.
To a degree you are right. But housing projections forecast a housing shortage which will likely lead to rent control areas and increased homelessness.
Renters and homeowners have been adapting to this grotesque game of interstate musical chairs for two years now. The loss of jobs beginning with the “two weeks to flatten the curve” caused many renters to seek alternative housing, so many of them found lesser accommodations with relatives, friends, or other rooms-to-rent situations. And every rent increase by the nouveau slumlords causes more of this adaptation. I see houses sitting vacant wherever I go. It’s not so much a matter of a lack of housing availability as it is a lack of affordable housing due to unrealistic expectations that this inflationary housing bubble and stock market bubble can survive ad infinitum.
Good luck selling goods or services (includiing your inspection services) for more than the market can bear, ad nauseum. Sellers are learning this basic lesson in economics on Wall Street right now. On Wall Street, though, they can falsely blame price corrections on wars and rumors of wars. And many will believe them.
I’d hate to see property being seized by the government but something needs to give, and IMO eventually will because the market can’t go on like this too much longer. My HOA recently added a new by-law that forbids a homeowner, with a few exceptions, to rent a property in the neighborhood.
My neighbor put his house on the market 2 weeks ago, within 24 hours he had 18 offers, all substantially over asking, he told me the contract he accepted was the one where the buyers told him to name his price, and of course there were no inspections.
That’s not far off from my experience not long ago. Investment/rental companies had started to dominate contracts and closings already in the area of Tennessee that I moved from. My HOA voted to forbid new rentals and AirBNB style agreements and were promptly sued by an avalanche of lawyers from the rental companies that were making large profits in the area before being forced to rescind the new bylaws.
When I put my house up for sale, I had about 18 offers in the first 12 hours, most of which were from investment/rental companies who didn’t even see the property, all above ask, all cash, all immediate close, and lots with unethical messages regarding ‘will beat top offer by $5K’ or ‘give us a last look bid and we will give you bonus cash’ etc. It was nauseating.
Instead, I accepted a competitive offer from a couple who were renting in the area and looking to buy their first home. They did pay for an inspection, and I voluntarily fixed many of the issues on the report out of workmanship pride even though I could have easily ignored them because I had so much leverage from the insane market demand.
I don’t know what the solution is, or how long this madness will last, the only thing I am absolutely certain of is that this situation is unsustainable. How and when it ends I don’t know, but it will end and it probably won’t be pretty when it happens.
While Bezos is encouraging people not to buy big ticket items such as housing, he’s investing in an industry that is having a direct impact on our industry. A double whammy for Home Inspectors.
At least flippers put homes back on the market. Flips seem to be representing about half my inspection business right now. On the other hand, institutional investors buy up large swathes of homes just to rent them out.
“Investors” have pretty much wiped out all my business this year, as well as any reasonable family’s opportunity to purchase a home. We had some of the biggest price increases over the past few years and as a result the foreign buyers have been on a frenzy. Many of these homes (some close to a million $) are vacant, with one in particular vacant almost 10 years. To these “investors” it’s just an excuse to park (cough launder) money, with the remainder being rented out (we have a near 0 vacancy rate) or Air BnBed. Guess how many are getting inspections?
I know this is true because a relative sold their home last winter and got 48 offers in one day, with about 25-30 of them sight unseen no condition offers from numbered corporations. They actually went for a slightly lower offer from a regular family who of course waived inspections and later had to gut the place but that’s another discussion.
