With an unrelenting lack of supply of RCFE homes FOR SALE, it will not be a buyer’s market anytime soon.
An Ongoing Seller’s Market
RCFE housing has lined up in favor of sellers for years now and it is due to a low inventory of RCFEs available to purchase coupled with strong demand. This demand is boosted by historically low mortgage rates.
It is tough buying an RCFE in today’s housing market. A couple browses until they find one worth seeing. After scheduling a showing, they write an offer to purchase because the home would be perfect for their RCFE dreams. It meets all of their requirements and it has the added bonus of being one of the few single-level homes in their preferred neighborhood. Excitement and anticipation are in the air as they wait for a response. Their enthusiasm begins to dim as they find out that there are other offers on their “perfect” RCFE. After going back and forth with the seller, the buyers learn that they were not the winning bidder. They have to go back to the drawing board and browse for their next opportunity.
This scenario plays out repeatedly across the United States, not just in Orange County. Many RCFE buyers find success, just not immediately. Other RCFE buyers, especially in the lower price ranges, write offers but just cannot seem to get one of them accepted. The same is true for buyers looking for suitable homes to convert into RCFEs. It is frustrating and many buyers come to a point where they simply want to give up. Should they wait until the market slows and tilts more in the buyer’s favor? Will it get easier anytime soon? Unfortunately, it will not get any easier and it does not make sense to wait to purchase.
What is going on is simple supply and demand. The active inventory has been at low levels ever since 2012 and a few times has dropped to unprecedented lows. The New Year will start with fewer available RCFE homes than 2013. That means that the inventory in 2021 will be in ultra-low levels come the Spring Market.
Demand is also currently at unprecedented levels. It has not been this high at the end of November since 2012 when housing just came out of its Great Recession slumber and was sizzling hot. With mortgage rates at record low levels, below 3%, RCFE demand will remain elevated. The low mortgage rate environment is forecasted to continue throughout 2021.
It is not going to get easier anytime soon for RCFE buyers. Waiting is not the answer. Based upon today’s supply and demand, the longer a buyer waits, the more RCFE homes and homes suitable for conversion will appreciate. That will be the story in 2021 as well. Additionally, mortgage rates are at unprecedented record low levels. According to Freddie Mac’s weekly Primary Mortgage Market Survey® released on November 25th, the 30-year fixed remained at 2.72%, its thirteenth record low this year. Mortgage rates are not forecasted to go any lower in 2021. In fact, there is a stronger chance that they will slightly rise as the economy improves next year. Higher rates combined with higher prices does not work in a buyer’s favor.
ATTENTION BUYERS: Do not wait to purchase your dream RCFE! Delaying a purchase will result in higher prices and higher mortgage rates, cutting into RCFE affordability. The current housing market may be frustrating, but it would be foolish to wait and not take advantage of record-low rates and lower home values.
Now that housing is in the thick of the Holiday Market, expect the RCFE inventory to rapidly drop through the end of the year. December is cyclically when fewer RCFE homeowners opt to sell due to the time of the year. It is also when unsuccessful sellers throw in the towel, choosing to enjoy the holidays and wait until the Spring Market of 2021. The lack of available RCFEs to purchase and the shortage of possible homes suitable for conversion into RCFEs will set the stage for a very hot 2021.
If you are considering buying, selling or leasing an RCFE, please call us TODAY to explore your options. We would be delighted to evaluate your business and provide price guidance. We will help you obtain the highest possible price for your RCFE.
Michelle (949) 397- 4506 & Melvyn (949) 500-3630