The Impact of Tight Inventory on the Housing Market

The Impact of Tight Inventory on the Housing Market | MyKCM

The housing crisis is finally in the rearview mirror as the real estate market moves down the road to a complete recovery. Home values are up, home sales are up, and distressed sales (foreclosures and short sales) have fallen to their lowest points in years. It seems that the market will continue to strengthen in 2018.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout the winter, supply is not keeping up.

Here are the thoughts of a few industry experts on the subject:

National Association of Realtors

“Total housing inventory at the end of November dropped 7.2 percent to 1.67 million existing homes available for sale, and is now 9.7 percent lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.”

Joseph Kirchner, Senior Economist for Realtor.com

“The increases in single-family permits and starts show that builders are planning and starting new construction projects, that’s a good thing because it will help to relieve the shortage of homes on the market.”

Sam Khater, Deputy Chief Economist at CoreLogic

Inventory is tighter than it appears. It’s much lower for entry-level buyers.”

Bottom Line 

If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.

 

Home Values Recover To Pre-Recession Values, Making It A Great Time To Sell

 

 

 

 

The Great Recession was one of the most challenging times in US history. The US lost nearly 9 million jobs, unemployment nationwide hit an astounding 10%, and housing prices fell a whopping 33%, causing American households to lose of $16 trillion dollars in net worth.

But luckily, the economy started improving in 2010. The GDP grew an impressive 19% from 2010 to 2017, and the economy added jobs for a record-breaking 88 consecutive months, recovering all the jobs lost during the recession. Not to mention, unemployment fell to 4%.

But one area that was a bit slower to recover was home values. Many homeowners who lost a significant portion of their home’s value in the recession have been hesitant to sell—especially if they purchased their home when prices were high.

But according to Evaluating The Housing Market Since The Great Recession, a recent report from CoreLogic, homeowners who lost value in their homes during the recession finally have something to celebrate. According to the report, the average house price is now 1% higher than it was at the peak of the real estate market in 2006, growing 51% since bottoming out in 2008.

pre-recession-values-cover

The Takeaway

If you’ve been waiting to sell your home for it to recover its pre-recession value, now is the time to make a move. Not only have housing prices recovered to their peak values, but the inventory crisis is driving up prices, making it the perfect market to finally sell your home.