Welcome to Picket's inaugural Market IQ Brief, a monthly perspective on the single-family rental market through the lens of a variety of supply and demand signals. Neither forecasts nor predictions, these snapshots shed light on the trendlines (and anomalies) affecting the investment opportunity in SFR.
This month, we look at single-family home inventory and prices across Picket's 20+ operating markets with an eye towards the 'golden cross' moment when the effect of lower-than-normal supply outweighs the higher cost of capital.
Inventory climbed from March '22 through August '22, but compared to historical levels across the last three years (and beyond), current inventory remains well below normal. Taking a look at four of our major market areas, we observed plateauing inventory levels in September '22 and steeper declines beginning in October '22.
Spotlight markets: Atlanta (ATL), Nashville (BNA), Charlotte (CLT), Kansas City (MCI)
As 30-year rates continue to climb (with another hike expected in December), would-be sellers and buyers are reacting to disincentives to transact. As expected with initial rate increases, we saw inventory levels rise across markets in the spring and early summer. Do the latest inventory declines reflect seasonality alone or a reaction to rising rates? We will monitor these trendlines closely through the months ahead.
After nearly two years of bidding war normalization and sale prices well above asking, buyers are in the driver's seat again (at least in this regard) as sale prices drop back to—and in many cases below—original list prices across our operating markets. In several markets (including the spotlight markets shown below) our clients are submitting successful offers between 5-8% below asking.
Where do tightening supply and rising 30-year mortgage rates leave list prices? And when can we expect to hit the lower bound?
Avoiding predictions and looking only at actuals, we're seeing a price plateau across markets from a mix of price growth deceleration and faint—not precipitous—declines. As inventory tightens, we'll be watching closely to see where prices move from here.
Our team is here with the data you need to make your own assessment of this shifting landscape. For more in-market observations or a complimentary strategy consultation, please reach out to James Newgent at james.newgent@pickethomes.com to continue the conversation.
Head of Business Growth and Realty Services
Technical Project Manager, Picket IQ
Aggregate market data comes from 10 of our operating markets: Nashville, Charlotte, Atlanta, Birmingham, Huntsville, Tampa, Jacksonville, Orlando, Kansas City, and Greensboro. Inventory and price data includes only homes with two or more bathrooms and three or more bedrooms priced between $100-$500K.
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