Housing headaches

Quick sales are great, but leave homeowners seeking short-term rentals

Posted on Jun 1, 2017 :: Insight On , Residential Construction
Posted by , Insight on Business Staff Writer

Selling a home quickly is the dream of homeowners who are looking to make a change, but sometimes selling too quickly means they’re left without a place to live, causing them to scramble to find temporary housing.

“The market is really exciting right now,” says Sean Lewis, a real estate agent with Adashun Jones Real Estate in Oshkosh. “Usually if your home is very nice and it’s priced properly, we’re seeing sales in less than three days.”

Monthly home sales figures compiled by the Wisconsin Realtors Association show steadily increasing sales between 2012 and 2016, from 11,256 to 15,171 annually. While new home starts also have increased — averaging about 3,000 single-family homes per year, according to regional building permit data — it has not matched pace, creating a pent-up demand for houses to buy.

Many of the buyers in the Oshkosh area are those who are looking to upgrade their properties or are new buyers entering the market, Lewis says. But “things are moving so fast, we are starting to see like a ‘Fear Factor’ from people that want to sell, but realize they won’t have anywhere to go.”

The second problem: Temporary rental options are limited.

Those with connections in the area might move in with friends or family if their house turns over faster than expected, Lewis says, or they might be forced into renting a hotel room. Some sellers push their closing date out, which can frustrate the buyer because they’re ready to get into their new house.

But some landlords are starting to see an opportunity for short-term leases, Lewis says.

“I know a couple of cases where landlords have said, ‘I’ll do a temporary rental,’” Lewis says. “It’s a little more expensive, but they’re making that opportunity available.”

A new market for mid-level rentals also is expanding in the area as companies such as Oshkosh Corp. gain new contracts and bring in new people who don’t want to buy right away, Lewis says. That and other new growth in Oshkosh is part of what’s fueling the hot real estate market.

“The west side of Oshkosh is growing, and now with the new Bucks (D-League) stadium coming in, I think that helps with bringing people and work back to Oshkosh,” says Emily Hollrith, also a real estate agent with Adashun Jones. “And especially a lot of the corporate jobs, like Oshkosh Truck, are bringing more people through.”

Additionally, with most mortgage rates in the area at less than 4 percent, people are jumping on the opportunity to buy.

“Money’s so cheap now and the lending is freeing up, so people have the opportunity to purchase a home a little larger than they would have normally,” Lewis says. “I think they’re jumping on that. And consumer confidence is strong right now.”

Hollrith, who mainly works with buyers, says they’re having to make decisions quickly once they see a house they fall in love with.

“If we can’t get the buyer within the first two to three days, we almost lose out on putting an offer in,” Hollrith says. “It’s moving quite fast, which is nice, but it’s stressful for both parties.”

It means that some sellers are hesitant to put a house on the market without having a new place ready, Hollrith says. “Most rents are around 12 months for a lease — short-term renting is just hard to find.”

That hesitancy is part of the reason for a low inventory of homes right now, says Ryan Fulcer, Appleton-based Wisconsin vice president for Coldwell Banker. While selling quickly can be great for a homeowner, “the unfortunate part is if they don’t have a Plan A, B, C and D, sometimes that creates the problems that they run into in our area.

“Right now it’s probably the most important time to have a Realtor working for a seller and buyer simply because they can help put the two pieces of the puzzle together,” he says.

Additionally, Appleton and the Fox Cities area consistently have been more of an ownership area, he says. “It’s more of a scarcity situation — there’s not a lot of single-family homes for rent.”

Fulcer has seen the need for these transitional properties.

“I own a lot of rental properties myself and only buy single-family houses right now for the last eight years, because that’s what people want, especially in transitional situations,” he says.

Most landlords aren’t interested in offering anything less than a 12-month lease, yet there is a growing need for people to enter into these transitional properties.

“It makes sense from a lot of different perspectives,” Fulcer says. “In our business, we’re helping our own clients out, where some of them would have to be in a hotel with their family. That’s not a real fun experience, unless it’s at a water park.”

Realtors can help sellers put together a timeline, an alternate housing plan and even talk to property management people, Fulcer says.

Lewis advises his sellers to set a realistic move date.

“There is a buyer out there who will wait two or three months if they have the right home,” he says. “If you set your closing date at 30 days and you’re not expecting a hit, you turn around and you’re behind the eight ball.”

But Lewis also has been encouraging landlords he knows to upgrade their rental properties and be open to temporary leases, which is a market that appears to be growing, Lewis says.

“That’s the direction I try to steer people, but it’s a new thought process,” he says.