Real Estate News

Low housing inventory defining current market

Published: 10 Jul 2017

The clash between apparent housing demand and supply seems to be a defining one for the current market. To understand the trends that may come, as well as the current predictions, it's increasingly important to consider the role low availability could play in how housing decisions manifest in the future.

Not prohibitive
A striking feature of the current market is the way that demand apparently persists, despite the cost issues and low amount of homes on the market. HousingWire quoted Nela Richardson, chief economist for Redfin, who described some of the ways that sellers can react in a situation like the current one, including the need to be "creative" to move properties.

"Sellers in hot markets can quickly generate several competing offers, but what they really need to be on their way to their next home purchase is a committed buyer who will make it to the closing table without delays or hassles," she said.

Demand going up?
Before the second quarter of 2017 began, there were already predictions for an ongoing spike in demand. Back in March, National Association of Realtors Chief Economist, Lawrence Yun, wrote about this in a piece for Forbes, anticipating a 2.2 percent increase in home sales and a 12 percent jump in the amount of people aged 30 years or older before 2018. This could pose an obvious problem, as more people find themselves in a position to purchase homes than there are available properties, since Yun also expected the number of newly built housing units to underperform.

A Kiplinger piece put forward a slightly different appraisal. While it also admitted to a gap between demand and supply, it depicted a somewhat brighter picture for construction, citing data from both the NAR and the Department of Commerce. It called the single-family home demand levels "healthy" and said that builders may be able to take comfort in the trends, despite the fact that low inventory levels will probably continue.

According to Marketplace, some definitely think the burden of the housing shortage falls to those tasked with building said homes. National Association of Home Builders chief economist, Robert Dietz, related the problem to numerous shortages, including a lack of funding and materials, as the source quoted. As a whole, the article also implied that this lack of housing for sale was a national trend affecting many different regions across the country.