There are too few homes for sale to meet the needs of buyers. So few that the average home for sale receives five offers according to a recent Confidence Index from the National Association of Realtors. This is causing housing prices to continually hit new all-time highs, while simultaneously creating the most competitive real estate market in history.
Competing for a home in this market can make you feel exhausted, frustrated, and make you want to give up. DON’T DO IT! Keep at it, your home is out there if you stay unrelenting and use the Bulletproof Buyer Program.
It will also help you to better understand WHY the housing market is where it is.
WHERE DID THE HOUSING SHORTAGE COME FROM?
The COVID–19 pandemic did a number on the housing market the past year, but COVID can’t take all the credit for the current inventory shortage. While it did cause home sellers to hold off on listing their homes this past year, the truth is the low housing supply has been years in the making.
The root cause for our current housing market has been created by the long-term decline in single-family home construction. New home construction has been falling behind for quite some time now. A recent report from the National Association of Realtors (NAR) tells us that historically, home builders completed an average of 1.5 million new housing units per year. Since the housing bubble in 2008, the level of completed new construction has fallen drastically.
The same NAR report elaborates on the underbuilding gap in the U.S., totaling more than 5.5 million houses in the past 20 years from 2001-2020. To fill an underbuilding gap that large, it would take the next 10 years to close that gap even with building more than the historical norm.
IS THE SELLERS’ MARKET HERE TO STAY?
Luckily, we are already seeing a good uptick in new home construction. However, newly built homes can’t bridge the gap we are facing on their own. To fix our supply issues, more single-family homes must come on the market.
An important factor in today’s market is the number of homes for sale. While inventory levels continue to sit near historic lows, there are indications we may have hit the lowest point.
To put it into perspective, the graph below shows levels of inventory rising slowly since the beginning of the year:
We know it’s challenging out there. Don’t give up! The Bulletproof Buyer Program will help make your offer stand out from the competition. Send us an email at TheInsightTeam@NEOHomeLoans.com to get started your process. We look forward to hearing from you soon!