Six Explanations To Low Inventory

Six Explanations To Low Inventory

What's the reason behind the lack of homes on the market that’s driving prices up and driving buyer’s crazy? There are a number of factors, according to a recent article at Real Estate Economy Watch.

1. Many home owners are still underwater. One of five homeowners with a mortgage still doesn’t have enough equity to sell. It’s not like what we saw during the depths of the housing crisis, but it's still affecting inventory levels.

2. Boom buyers are still holding out. About 16 million families bought homes in the peak of the boom around a decade ago, and many are still waiting around to make a profit, even if they aren't underwater.

3. Inventory shortage is squeezing move-ups. Owners who may be ready to move into a larger or more expensive home are often considered hidden drivers of the market. But right now, price instability and the lack of available homes is causing this group to hold off.

4. Investors aren't ready to sell single-family homes they're renting. They're making money from both rising rents and home price appreciation.

5. New-home construction is still very low. Predictions are that builders will make a dent in the higher-tier housing soon, but that they would help the inventory problem more if they concentrated on the lower-end demand.

6.Baby boomers are running behind. Everything from later retirement ages, longer careers, better health, and loss of household wealth/equity during the Great Recession have contributed to a slower-than-expected timeline for this generation


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Phone: 561-951-3759
Dated: March 25th 2016
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