Let’s talk about the low inventory crisis in real estate.
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: Bob and I were just taking a look at some stats here. What we realized is there’s a trend. There’s a trend since, let’s see, it’s November of last year, where the supply side has continued to deplete, and the demand has not. So, what we’ve got is, the inventory’s being absorbed more quickly every month.
Bob Nelson: And less inventory being added every month. So, we’ve got a double collision that’s occurring, which has a detrimental effect on, if you wanted to go out and buy something, “Show me everything,”; you saw two of them.
Marcia Edwards: Yeah, inventory is… it’s just unfortunate. And they’re not making any more of this. Usually, you’re thinking, “Well, we have an opportunity of expansion.”
Bob Nelson: Well, you can’t just push a button and make a house, or an apartment house…
Marcia Edwards: And no matter what button you try to push, or what you do in your efforts, you can’t make it affordable anymore.
Bob Nelson: Right.
Marcia Edwards: We don’t have the land supply, urban growth boundaries are not going to expand right now, so what we’ve got is a lot of people going into bedroom communities of Eugene and not staying in the city proper.
Bob Nelson: And that’s going to be an interesting impact. At the same time, does that suggest that… Now, we picked on Eugene. How about Salem? There’s people that listen to us in Salem, Klamath Falls, et cetera.
I would say every community is looking at that, that has any degree of net in-migration or net growth factor. It’s the same pretty much every place. But it’s really interesting, as I see that, the trend is not going to particularly reverse itself, because you can’t just push a button and make something appear because there are people that would like to have one.
Marcia Edwards: And there’s also going to be continuing demand. The demand right now is peaking because of a few things. Tenants are saying, “I don’t want to pay this much rent,” and, “Boy, look at those attractive interest rates. For what I’m paying in rent, I could buy a nice house in theory. I have a good amount of money to proceed on that.” And then, they try to find that house and cannot.
Bob Nelson: Yeah. And that’s an interesting process. I’ve had some brief experience in the duplex market where owner/occupants are starting to buy one side to rent out the other side. That’s one less unit that’s available to be occupied by a tenant!
So, tenants are going to get squeezed on this thing, and to a great degree, it started, in my opinion, with the Tenant Protection Act. Now, that’s our rent control process.
Marcia Edwards: And urban growth boundaries are a good checks and balance. It’s going to be interesting to see how this squeezes in the state of Oregon going forward with that in play.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.