When my boys and I go back to South Dakota to hunt pheasants, one of the most interesting things to observe (besides the massive cultural chasm between the Bay Area and rural America) is the real estate market.
In some parts of South Dakota, the inventory and the “days on market” are almost infinite b/c supply vastly outstrips demand. It takes far fewer people to work the huge farms in the region and rural populations have plummeted. Oddly – people aren’t migrating to a region where temperatures range from 110 degrees above zero to 50 degrees below zero :).
Anyway – in sharp contrast is a market like Oakland, where inventory shortages plague the market. Here is a Housing Wire article that explains why inventory remains so low.
1. Average home-ownership tenure has nearly doubled since 2007 from about 4 years to almost 8 years.
2. Homeowners do not want to sell and give up their low fixed rates.
3. Homeowners are afraid they won’t be able to find a replacement home that meets their needs in a competitive market.
4. Investors own a much larger percentage of homes now, and they typically hold properties longer than owner-occupants. Investors like their rental returns and riding out the appreciating market.
Inventory also remains low in places like Oakland b/c it gets snapped up so quickly due to high demand; Oakland is now an awesome place to live with an excellent climate, a very strong job market and an amazing restaurant and City scene.
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