Home builders are having a hard time moving inventory right now. To anyone in that industry, this obvious statement is not news, but rather a frustrating repetition of reality. But calling the present state of affairs in the housing construction market a “hard time” is an insult to the word. You’re looking at “hard” in the rear view mirror and watching “catastrophic” looming on the road ahead. In fact, builders are on track to construct the fewest single family homes in history during 2011.
In history! That covers a lot of ground because the human race has been living in houses for a while now.
July numbers show housing starts down another 1.7%, which doesn’t sound like much but translates to plenty of economic pain for an industry that’s been battered in recent years. The interesting thing, though, is that when you delve into the numbers more closely, you find that while single family starts were down 4.9%, multi-family starts were up 6.3%. You read correctly. UP. Actually, this does make sense and reflects a reality that Open Door Auctions has been pointing out for a while now.
Homeownership continues to decline as consumer confidence sinks, not helped in the slightest by the recent debt ceiling debate and national credit rating downgrade. But there has been a pleasant side effect that should buoy the spirits of home builders in the multi-family housing business. The reason is simple. The lack of confidence towards owning a home results in a soaring demand for rentals. People aren’t renting single family homes with the intention of eventually owning it. Many can’t get a loan and, even if they could, aren’t about to run out and buy a house in this economic climate.
Mid-Atlantic Builders of Rockville, MD, provides a good example of the mess home builders find themselves in these days. Executive Vice-President Stephen Paul had this to say: “”We started what we call the spring market in February. We started out very strong, we had a good February, March, even into April. What started to cause consumer confidence to wane was the escalation of gas prices, the debt issue with the government, and what’s going on in Europe.” Does this sound like a lack of confidence to you? It does to us. Paul added, “We see people not sure what to do at this moment and a little unsure,”
That leaves us with a surprisingly robust rental market because, as Jason Hartman is fond of saying, “Everybody has to live somewhere. Housing is a universal need.” But the twist on the scenario is that rental demand is rising in what is called multi-generational family homes, which include an add-on suite for parents to move in for the express purpose of helping out with expenses like mortgages and insurance. Maybe single family residences aren’t selling right now but rentals and multi-generational structures are! Which means if you’re a builder who has inventory of this type, we’re ready to help you sell it.
Too many builders spend too much time and effort trying to sell their inventory of houses with the traditional real estate industry’s approach. The problem with that is that the wheels of progress move so slowly you’re stuck with a backlog of properties sitting on the market for an eternity while an agent slogs through the showing and negotiation process. Real estate veteran, Jason Hartman, couldn’t help but notice the dysfunctional nature of the way things operated, and decided to change all that. The end result was Open Door Auctions (ODA), an entirely new approach to buying and selling houses that uses volatility to turn the MLS into a virtual stock market for real estate.
The bottom line is that Jason and his team of experienced innovative agents, like Molly and Nicole, stand ready to help home builders sell their inventory in two short weeks. With a process unconstrained by a century of misguided tradition, we get your houses on the market and sold quickly, usually drawing anywhere from ten to two dozen bids at auction. If you’re suspicious about our real-world results, we don’t blame you, but remember, plenty of people used to have a highly suspect opinion of the internal combustion engine also, and it’s been around for a while.
There are a couple of ways we’d like to reassure you that the Open Door Auctions strategy works and is the best approach for your business in this wretched market. The first is simply to visit our website and browse our listings of properties, both sold and for sale. The numbers are real and the demand is there. If your real estate agent is whining about low demand, he’s doing something wrong. We’re selling houses of all types nearly every weekend, after our two week marketing blitz, of course.
The second way to soothe your concerns is simply to contact us through the website. One of our well-qualified agents will be in touch with you shortly. Home builders ready to get inventory moving right away, should navigate to the “sell” section and get started.
The Open Door Auctions Team