Rental Demand Could “Catch Up” in These Oversupplied, Struggling Markets

On The Market

BiggerPockets

Investing, Education, Business, News

4.8 • 859 Ratings

🗓️ 14 October 2024

⏱️ 36 minutes

🔗️ Recording | iTunes | RSS

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Summary

America is experiencing a strange housing supply problem. On one hand, we don’t have enough housing supply nationally; on the other, we have too much housing supply in cities like Austin and Fort Myers, and as a result, these cities are seeing significant rent declines. Meanwhile, rents are still going strong in much of the Midwest, as their supply-constrained markets give landlords and real estate investors the upper hand. But, even in the “oversupplied” markets, is there a chance for rent price redemption in the future? We brought on BiggerPockets’ own Market Intelligence Analyst, Austin Wolff, to share his latest findings on housing supply. Austin talks about why rents are growing in some parts of the US but declining in more oversupplied markets. But with the slowing down of construction, will these oversupplied markets become undersupplied? Will landlords in these markets be happy they held onto their properties in a few years? Austin also shares the exact market he’s making his first real estate investment, which boasts high demand but has yet to see a significant supply bump for his asset class. Does higher supply always mean lower rents? Not quite, and we’ll get into why in this episode! In This Episode We Cover The state of our 2024 housing shortage problem and why we may be under and oversupplied Where rent prices are falling and the cities with the most supply coming online When demand could finally “catch up” to the high supply these markets are experiencing The correlation between supply and rent prices (and why they aren’t ALWAYS opposite) Long-term rent projections as building starts to slow and demand stays high And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Easily Identify Your Next Market to Invest In with BiggerPockets Market Finder Dave's BiggerPockets Profile Connect with Austin Check Out Austin’s Data-Driven Blog Posts Bureau of Labor Statistics Census Data CoStar Zillow Data Master the Simple Formulas Behind Every Great Real Estate Deal with “Real Estate by the Numbers” Jump to topic 00:00 Intro 04:49 Our 2024 Housing Supply Problem 08:22 Where Rents Are Falling 13:13 Demand Will “Catch Up” 17:31 What Happens When Supply Rises? 25:46 Long-Term Rent Projections Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-260 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Right now in the U.S., there is a shortage of somewhere between three and seven million homes or housing units, depending on who you ask.
0:09.4	And this constrained housing supply is one of the biggest hurdles for investors and everyday homebuyers alike.
0:16.6	But supply is slowly starting to change.
0:19.7	And today, we're going to dig on where supply is growing and what it means for investors.
0:29.3	Hey, everyone, it's Dave.
0:30.9	Welcome to On the Market.
0:32.5	And I'm super excited to be honest about today's episode because our guest is Austin Wolf, who is a Bigger Pockets employee.
0:42.2	We work on the same team together.
0:45.0	He is our new market intelligence analyst.
0:49.3	And his job at Bigger Pockets is to study the housing market, to look at what's going on in different
0:55.2	markets and bring them to our audience in different formats. So he has contributed to the
1:00.3	market finder tool. He's a regular blog author. And for the first time, he's coming on on the
1:05.5	market to share some original research that he did into housing supply, what's going on in various markets
1:12.3	and how it's impacting rental performance, vacancy rates across the entire country.
1:17.6	It's super cool research.
1:19.1	I think you're going to learn a lot.
1:20.6	First and foremost, I'll provide a little bit of background about housing supply and how we
1:24.6	got where we are.
1:25.9	Then we'll talk about where supply is increasing
1:28.0	across the U.S. And of course, we'll center our conversation around how investors might use
1:33.5	current market conditions and the research that we're sharing to benefit your own portfolio.
1:38.8	So let's bring on Austin and dig in.
	...

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