If you’re out there in the real estate community, either as an agent or you’re buying real estate, you can not help but notice the incredible lack of homes available.
Why is Buying Real Estate Such a Hard Thing in Todays Market?
There are numerous factors that have contributed to this unbelievable market! Some factors including historically low inventory only serve to make this particular market one of the most challenging in my memory!
So, what are some of the contributing factors to why this is happening? Let’s take a look…
Homeowners Still Reeling from the Latest Correction
Simply put, most homeowners that were lucky enough to make it unscathed through the last 7 or so years of the last real estate market are just now even able to consider selling their home. With some sellers really unable financially or with the inclusion of somewhat damaged credit, many simply can not get a new mortgage that would support moving up or down.
I recently had a potential client who wanted to sell their home to downsize to a smaller residence. I had them speak to my lender and after several attempts, their ability to obtain a loan was unsuccessful and they simply opted to stay put. I’ve heard this from other agents in my sphere as well. Some homeowners would love to sell and take advantage of this market but their net proceeds alone would not be enough for them to purchase a home after they sold…so they are just not selling!
Lower Interest Rates
You would think this is a good thing however, the rates are low for folks on the refi side as well! And, that’s exactly what they’ve done! Now comfortably settled, many homeowners have no reason to sell! Couple that with those who are buying real estate and have already taken advantage of these great rates essentially eliminating a good portion of the existing inventory and Viola…you have little to no inventory of available homes for sale.
Some Homeowners are waiting it out
As with all markets, there are ebbs and flows. Currently, some homeowners are attempting to “Time the Market”! This is resulting in homeowners holding on to their homes in the hopes the market will continue to increase the value of their home. What will happen as it has always happened, eventually, the inventory of homes will begin to increase as the number of buyers begin to decrease essentially leaving some homeowners taking less for their house as inventory of available homes goes up as the buyer base begins to retreat! HINT: Sell now before this happens!!!
Sellers Becoming Buyers
Most sellers I talk to want to make sure they have a home to buy if they sell. This is the issue! If the homeowner themselves enter into the buyer pool and can’t find a home to purchase, they’re forced to find alternate means of residency such as short term rental options which chips away at their downpayment funds!
Lastly, a Lack of New Homes
I’m sure you have noticed a terrific uptick in the number of new homes being built around your area. 2 issues with this…
- New home construction (starts) continue to be at an all time low as builders and banks are still feeling the impact of the last real estate market.
- The process from start to finish of a new home project or development is very long. From the moment land is acquired to the time you can actually purchase the home can be 2-3 years. Until this process is accelerated, new construction inventory will remain low and prices will only go up as build costs mount for the developers!
I am passionate about Real Estate and eager to answer all of your real estate questions! Text or Call me at 360-880-2356 or email me directly to ask about Buying, Selling or Investing in today's Real Estate Market - serving Lewis County & Thurston County, WA.
Certified Residential Specialist | Real
Mountain Valley Real Estate