How buyers and sellers can navigate this low-inventory real estate market.
Many people wonder why housing inventory remains low despite an increase in the number of homes for sale. It’s a common concern among those searching for a new home, and the shortage has been ongoing for years. The housing market faces multiple challenges contributing to this issue.
One significant problem is underbuilding. Builders have not constructed enough homes in recent years to meet the growing demand, which has resulted in a lack of available properties. For 14 consecutive years, builders failed to build sufficient homes to maintain historical supply averages, further exacerbating the inventory shortage.
Another factor influencing the low inventory is the mortgage rate lock-in effect. Over 70% of existing mortgages have rates lower than 4%, making many homeowners hesitant to sell and move. This reluctance adds to the shortage of available homes.
Additionally, misinformation in the media has created unnecessary fear. Reports of potential housing crashes and significant price drops have caused concern. However, with an inventory shortage and continued buyer demand, such extreme predictions are unlikely to materialize.
So, how does this low inventory issue affect you? For buyers, it’s essential to explore various options, locations, and housing types to secure a home. While interest rates have risen, well-priced and effectively marketed homes still sell at high prices.
Sellers, on the other hand, can benefit from the low inventory issue. In today’s market, a well-priced and well-marketed home stands out, even in a higher interest rate environment. If you’d like to discuss the low inventory issue and its potential benefits further, please call or email us. We’d love to hear from you!