It’s no secret to those of us in the Denver-metro area that the number of homes for sale has dropped like a stone in recent months. The surprise, perhaps, is that we’re not alone.
Low inventory, it turns out, is a nationwide trend.
“Not long ago, frenzied markets were limited to select metro areas like Seattle, San Francisco, Boston and other tech hubs where young adults were moving,” notes Realtor magazine. “Now the tumult is everywhere.”
Housing markets nationwide are fast-moving. The average home sells in a mere 18 days. Meanwhile, prices are rising due to tight supply. Each of the more than 180 metro areas tracked by the National Association of Realtors (NAR) has seen year over year price increases. In fact, prices have increased for 109 straight months nationwide, according to Jessica Lautz, vice president of demographics and behavioral insights at NAR.
Is there any relief in sight? Realtor magazine predicts upcoming change due to:
Vaccines: Many potential home sellers stayed out of the market during the pandemic, unwilling to open their homes to strangers who might be infected with COVID-19. With more people being vaccinated, the number of homes for sale could increase as homeowners feel less vulnerable to the virus.
New builds: Housing starts are now at their highest level in 14 years, reports Lautz. (While this is great news, it’s tempered by the fact that new builds have been low for over 10 years; the current increase is simply making up for lost time.)
People needing cash: A recent survey by CoreLogic showed that many homeowners are behind in their mortgage payments while holding a fair amount of equity in the home. “Even those in forbearance programs have an average of $87,000 in equity right now,” Lautz said in the Realtor magazine article. She notes that homeowners in this situation may sell in order to reap the equity they have in their homes.
Building repurposing: There has been much discussion about repurposing vacant offices and hotels into apartments and condos. If this happens, it could lead to more home inventory.
Homeowners planning to sell: According to a recent report by Realtor.com, 10% of homeowners surveyed said they plan to list their homes for sale this year. More than double that number—26%—say they plan to list within the next three years. This is the best of news for buyers: “… [T]his much-needed inventory—especially for starter homes—will begin to relieve buyers’ challenges in a very competitive market,” notes George Ratiu, senior economist at Realtor.com.