In February of 2020, my life was normal and easy during the short winter month. All the rents were paid, over 220 units had heat and love was in the air…good times. Then, well, you know, the world went bat sh*t crazy and one thing we all had in common was that none of us could have imagined the future chaos that would ensue.
For the first couple of months paralysis was the key word, tenants stayed put and only a handful of owners brought new units into our inventory. Luckily, because a vast majority of our clientele are military households, we only had literally two instances where someone couldn’t pay the rent because of the pandemic. That said, it was a great relief to look back on and appreciate the great screening we have done over the years and the type of housing we specialize in. Some companies weren’t so lucky.
As summer drug on we still had the eerie stagnation of the market where we normally would be in our busiest cycle of the year but instead just crickets. No PCS moves from our military households. Traditional summer movement for civilian job transferees was very spotty. However, we did notice a trend on the real estate sales side of our company. Houses were selling. Houses were selling quickly. Houses were selling for a little over asking price. Houses were selling in consistently multiple offer situations. I felt certain that the pandemic would crush the real estate (sales) business and boy my crystal ball was dead wrong. The market started going Bananas.
Word got out. By fall, we started getting the calls from owners who wanted to sell at the end of the current tenants lease. At first, I didn’t think that much about it because it was four or five houses and the tenants were either already planning to vacate or certainly going to be able to find another home.
By the summer of 2021, we had sold almost 40 houses out of our management portfolio and lost another 10-15 houses to other realtors with whom the owner had a prior relationship. We do sell houses and we don’t mind the work or the reward for doing so but at some point I had a feeling this hot market was going have a much bigger impact on Clarksville than we were prepared for. Crystal ball worked on that one.
In June of 2021, Clarksville was down to only 300+/- houses for sale and of those only 150 or so were existing houses. Prices had shot up in some cases by 20%. The bidding wars were intense and for the most part first time buyers with a VA loan were scratching their heads as they could seldom win the bid and many opted just to sit out for a bit and rent. And that’s where we get into the challenging part of the story for Clarksville.
Because so many owners of single family rentals had or were deciding to sell, there was very little inventory. At one point I pulled the numbers from our MLS and there were 30 single family homes for rent in all of Clarksville. Think about that. 30 single family rental homes available in a town of 200,000. With this in mind, the rents have been going through the roof out of a simple supply and demand equation. In some cases, I look at the house that would rent for $1050 (pre-covid) which is now gobbled up in days at $1295. Wow.
So what’s the point of this rant? The point is that Clarksville desperately needs both new construction and even more so we need good single family rental homes. With the market still hot at the time of this writing, I expect our sales inventory to remain as tight as it is for some time to come and our rental inventory to be extremely tight and coveted. If you own a house in Clarksville, you are sitting on a gold mine with an oil well under it if you choose to turn it into an investment.
The silver lining?
The silver lining in this for property managers like myself is that anyone who bought in the last couple of years and has to transfer their job or for what ever reason needs to get out of their house…….selling will most likely not be an option and that only leaves renting it out. In the next couple of years, I expect our rental market will be back to a normal and competitive level in terms of inventory and pricing. Until then, good luck.