Shortage of home inventory is causing prices to increase - along with the stress of home-buying.
Throughout the past few months of 2018, the real estate home inventory has been at a historically low level. There aren’t enough homes on the market to accommodate the current demand for homebuyers – and that is creating a lot of stress on those currently searching for a home.
Real estate in the springtime is usually like a buffet – an excess of people gather around to choose from mountains of food, and the possibilities are endless. But this year, the market is acting as if everyone showed up to the buffet just as the servers were closing up – dishes are being taken away, the possibilities are scarce, and everyone has to scavenge to find something of their interest.
Now imagine that the few possibilities that are left just doubled in price. This is how the housing market is right now – few options at an overpriced rate. While job and income growth are at a steady rate (this accounting for the number of people interested in purchasing a home at the moment) these record low supplies are causing a large rift in pricing. According to Ralph McLaughlin, chief economist of Veritas Urbis Economics, “for homebuyers, this is shaping up to be one of the most difficult years in recent memory.”
NAR states that the median home price was up 5.9% from last year, and the number of starter homes is down 14.2%, making it especially difficult for millennials to purchase their first home. In February, there was only a 3.4-month supply of existing homes across the nation, making inventory the lowest on record for that month.
This inventory shortage is causing clients to make rash decisions – and some, who are lucky enough to find a home that fits their interests in a reasonable price range, are even making offers on homes sight-unseen. This spring market is going to be tough for clients, especially new ones. It is the job of the agent and the brokerage to assist them to the best of their abilities – although it may not be an easy feat.