Vanishing Inventory:Real life examples from Jacksonville FL

[Charles A.]

I know Jacksonville FL has been very popular on BP for the last several years.Inventory has been crazy low even in the middle of a drawn out pandemic.

However,the low inventory didn't truly hit home until I had a few vacancies this month and asked my agent to list them.

As is customary,I went on Zillow ,typed in my zip code and adjusted the filter for number of beds/baths and the desired rent amount.

To my amazement,in my entire zip code,only one other unit was on the market for rent in my price range <$1000.

Then the agent sent me "rental comps" the next morning in order to advise on a reasonable list price.It turned out 4 out of 5 units on his comps list were my recently rented units as well.At that point,it was clear we were our own competition.

Nobody is selling.Whatever is coming up for rent is being snapped up in record time.

The following week,a duplex came up for sale on MLS at the beach for $369,000.My notifications alerted me and I thought that was a fair price since I could probably get $1700 in rent for each unit with minor cosmetic upgrades.I checked "days on zillow"....8 hours!

I immediately called the listing agent directly and within the hour we came up with a full cash offer with only inspection contingency.I also inserted an escalation clause to raise offer price to $374,000 if seller received any other cash offer over full price.

The next morning,there were multiple offers and the seller had decided to go with another offer.

This is the terrain.

This is the climate.

It's a far cry from 2013,Joey!

There is so much cheap money floating around now that I suspect the game is no longer just about cash flow but about sheltering good debt.

Any available real estate is likely one of the best shelters of cheap money.Since cash will almost never be this cheap again,it's common sense that hiding as much of this as possible today even in a marginal deal is a no brainer since the same cash may cost triple the interest rate within the next decade.

It beats burying it in the front yard.And neither Gold nor crypto cash flows.

Happy plunging inventory ! ;-)