The Housing Shortage: Where’s the Hidden Inventory?
April 27, 2022
It’s no secret that there aren’t enough homes available for current prospective buyers, and it’s not uncommon to hear of people unsuccessfully bidding on a home or not getting an offer in fast enough. So what can you do to make your homeownership dreams come true when there is a shortage of available homes?
At The Mortgage Firm North Central Florida, we’ve helped countless buyers get into their homes. As we enter the busy home-buying spring and summer season, read on to learn our tips for finding a home even when it doesn’t seem possible.
There are several reasons for the inadequate number of available homes, including the following.
- The large size of both the Millennial Generation as well as Gen Z are now forming families and buying homes.
- A low supply of homes for sale.
- Supply chain delays and disruptions.
- Labor shortages.
Due to these factors, there are not enough homes for sale, and newly built homes in North Central Florida are taking much longer to be completed. In addition, with the desire of groups like Gen Z to purchase homes for primary residency as well as to build rental portfolios, the home shortage can feel increasingly overwhelming. Below are some ways you can still get what you need in the homes department without having to wait out the shortage:
How to Find a Home
Consider a Rehab Loan
The FHA 203(k) loan, otherwise known as a rehab loan (or renovation loan), allows you to either buy a new home or remodel an existing home and borrow the money for renovations. This loan is a great way to make your existing home suit your family’s needs better or purchase a fixer-upper with potential that other buyers may have overlooked.
A rehab loan lets you pay for your renovations over time for buying an outdated home or one that needs significant repairs or renovating your current home. This loan is backed by the Federal Housing Administration (FHA), making it easier to qualify for and sometimes offering lower interest rates than other private loans.
Another option here is the Freddie Mac Choice Renovation Loan, which allows buyers to purchase a home and renovate that same home under one single loan (instead of using two separate loans).
Additionally, Fannie Mae HomeStyle Renovation Loans allow homeowners to secure a loan for multiple home renovation projects including but not limited to: landscaping, luxury renovations, home repairs, and energy updates. These loan types are often very affordable, and as mentioned above, very flexible. One of the options above may be just what your family needs during this unprecedented housing shortage!
Build a New Home
Constructing your own home is a way to avoid the competitive bidding wars and the stress of competing with other potential buyers, plus you can build your new home to your exact specifications and preferences. If you’re suspicious of the price associated with new homes, consider buying a spec home that the builder completed without a committed buyer. You can also skip using a real estate agent when you go this route, which may get you a discount on the purchase price if the builder doesn’t have to pay a realtor’s commission.
In this case, you may also want to consider a construction loan. Construction loans are short-term loans secured during the duration of the building process that covers the cost of building your new home. Construction to permanent loans allows builders to transfer their construction loan into their final mortgage loan once the build is complete, creating a seamless loan experience.
Work With a Reputable Agent
When shopping for a home, it’s best to use a real estate agent who knows the area well and may also have access to what are known as “pocket listings,” or a property that is available through private channels rather than the traditional MLS. Being among the first to know when a home becomes available helps put you in a good position to make one of the first offers.
Similarly, you can ask your realtor about expired and withdrawn listings that may have been removed from the market due to lack of interest. With today’s crazy market, the seller may still be willing to sell their home at a premium price.
In the same way, working with a larger brokerage can also work in your favor. Larger brokers see more homes listed from their colleagues, often have more years of combined experience, and typically have built a network of community partnerships, which will always benefit the buyer.
Make an Offer to Existing Homeowners
We can’t promise this tactic will work, but if you’re unable to buy a home using any other method, it’s worth a shot. If there is a home you think is perfect for you and your family in the right part of town and with the amenities, you’re dreaming of, you could check with the homeowner to see if they would be willing to sell to you. If they are renting the property out, you could ask if they would be open to selling it to you once the current tenants leave.
The Mortgage Firm NCF Helps Ocala and Gainesville Achieve Their Homebuying Dreams Come True
At The Mortgage Firm North Central Florida, we help you secure the best loan for your unique situation — whether a rehab, existing home, or new construction loan — so you end up in the home you’ve always dreamed of. Reach out to our expert team today to find out more about how you can find a home in Gainesville or Ocala even when there may not seem to be any available.