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.”
NOTE: NAR’s Pending Home Sales Index for November is scheduled for release on December 27, and Existing-Home Sales for December will be released January 24; release times are 10:00 a.m. ET.
Senior Economist for Realtor.com
Joe Kirchner, Ph.D.
Senior Economist, realtor.com®
Dr. Kirchner leads research, provides economic analysis and and conducts forecasts on economic and housing market trends. He is frequently interviewed by the media and asked to present at real estate industry events.
Based in the Washington, DC area, he stays abreast of important policy developments affecting the housing market and collaborates with associations and think tanks on potential research initiatives.
“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.”
Home buyers better get ready ... to wait.
Fewer newly constructed abodes were finished in November—which means not enough of these badly needed residences hit the market, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
Only about 1.116 million new homes were finished in November, according to the report. That's down 6.1% from October and represented a 7.2% drop from November 2016.
Sam Khater, Deputy Chief Economist at CoreLogic
“Inventory is tighter than it appears. It’s much lower for entry-level buyers.”
Sam Khater holds the title executive, Research & Insights, and Deputy Chief Economist at CoreLogic, America’s largest provider of advanced property and ownership information, analytics and services. He is responsible for analysis and commentary on the real estate and mortgage markets and is regularly quoted by trade publications and national news outlets, such as The Wall Street Journal, New York Times, Bloomberg, etc.
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.