It’s a question I’m asked all the time…Why is home inventory so low? There are several combining factors for why there are not enough homes for sale in relation to the number of buyers:
- Under supply of new construction
When coronavirus lockdowns hit this spring, many builders were forced to halt construction. By summer, new home buyers began flooding new homesites, with an influx of younger millennials making up for a growing portion of new home sales. Despite the strong demand, homebuilders are limited in how quickly then can increase their inventory; A shortage of skilled workers, recent increase in lumber prices (further exacerbated by fires in California), and a rise in land costs have all slowed the builder timeline, and made new construction a less affordable option for many.
- The end of stay at home orders brought a record number of homebuyers back into the market, but has failed to bring a consistent number of sellers back
When stay at home orders were in place, many sellers who were ready to list chose to postpone selling their home due to concerns over the pandemic. While large numbers of buyers flood the market today, the return of sellers has been less consistent, thus contributing to the low inventory of resale homes.
- The length of time homeowners are staying in their home
A market shift that began 10 years ago, is contributing to the housing shortage today. Previously, 5-7 years of owning the same house used to be the norm, until the housing bubble burst. Since 2010, the length of time has increased to 9-10 years, primarily due to homeowners desire to recoup their equity.
Now is a great time for homeowners who are ready to move to break the 10 year trend and sell, especially with buyer demand so high and inventory so low. Additionally, with low interest rates, there’s an opportunity for sellers to maintain a low monthly payment while getting more house for their money.
Contact me for more information on listing your home and the best practices for doing so during this COVID period.
Carrie Pagnussat, REALTOR®, MBA, GRI | HomeSmart | 602.300.1650