My initial thoughts were the opposite, that if it costs more to buy than it does to build, then there is an inventory shortage.  

@Dawn AnastasiI see there is no shortage of ways for tenants to steal electricity. 

Very difficult to find reputable tenant turnover, especially during a pandemic and labor shortage.

There could be a shortage of housing of the likes we have never seen.

That rent is below market, and there's a shortage of good quality single family rentals on the market, so we currently have it listed a bit higher.2015 APOD:Income: $16,200Insurance: $688.12Taxes: $4,697Water: 773.84Management: $1,620 (we manage it ourselves but put that in there anyway).R&M: $810 (we didn't incur this in 2015 but put it in there anyway because it's good practice).NOI: $7,611.16OER: 53% (mostly because Jaffrey RE Taxes are high, and the rent is below market at $1,350 since we didn't raise it for the last 4.5 years).

While interest rate hikes will hinder some buyers and some valuations, they are still below the average norm and (at least in So Cal) the housing shortage remains.

I’m in Texas and it’s easy to pick good appreciating cash flowing SFR out here due to massive population growth and a shortage in housing.

@Rohini ParabSomething else to consider in addition to what everyone has said is that your cost will be significantly higher than the prices properties are listed for in those areas due to supply shortage and high demand.

There is a shortage of inventory in virtually every major real estate market across the county.

Earlier this year there was a shortage of homes for sale compared to buyers looking for homes.