There are more homes on the market - but will this end the shortage?
Since the beginning of the year, we have talked about the intense shortage of homes that have been on the market – but could this home shortage potentially be ending?
According to realtor.com’s July report, a third of the 45 largest cities in the United States had a large growth of homes on the market. However, chief economist for realtor.com Danielle Hale also stated, “July inventory growth is in high-priced, competitive markets, and often at the pricier end of these markets,” meaning that the new homes on the market are still expensive and in high demand.
Home inventories worth $200,000 or less are still down 15.6% nationally, but the ones worth $350,000 or more are up 5.7% nationally. This is still frustrating for many homebuyers, as the homes on the market are typically too expensive for purchase, but the shortage is slowly decreasing, at least for the pricier homebuyers.
What does this mean for the real estate market? According to Hale, “Although signs of an inventory turnaround are encouraging, whether they mean good news for buyers remains to be seen. These areas are seeing more new listings and some construction growth, but high prices and fast-selling homes are causing some buyer hesitation which is reflected in fewer home sales.”
Buyer hesitation has been very prevalent throughout this current fiscal year, and home prices are expected to continue to rise an estimated 5.1% in 2019. As Hale stated, the future remains to be seen – continued increase of prices is not necessarily a good thing, especially with the strong apprehension we’ve seen with buyers this year, as well as the frustration that followed, both in the lack of homes on the market and the inability to afford the ones that were. However, we are always hopeful for a brighter future, and construction is still in the works – the shortage will end eventually, slowly but surely.