More Buyers Less Homes

     Hey everyone, there seems to be a continuing issue out there in regards to Real Estate. Buyer demand continues to increase, but the amount of available homes does not match up, which indicates a shortage of homes in the market. The National Association of REALTORS® has credited the drop in home sales to a diminishing inventory in for sale homes. “Recent price increases are not deterring buyer interest,” notes Lawrence Yun, NAR’s chief economist. “Rather, inventory shortages are limiting sales, notably in parts of the West.” The prices of homes have been consistently rising, and the buyers are ready and willing to pay these increasing prices, but the problem lies with the sellers. If people are not comfortable listing their property just yet, then these ready, willing, and able buyers will be left unsatisfied. CNBC has reported that current home owners are not putting their homes on the market fast enough to compensate for the decrease in distressed volume. In the past two years, distressed sales have been responsible for upwards of one third of home sales, as opposed to the recent numbers where distressed home sales are down to 24% of overall home sales. Sellers are still awaiting a more substantial recovery before they list their home in order to gain back more of the equity they had lost during the collapse.
     One possible way to overcome this unbalanced buyer/seller availability is the construction of new homes. We need more new home construction in this market in order to gain some equality or balance, and we have actually seen a 43% increase in new home construction compared to a year ago. Although this increase is definitely a positive sign, the overall number of new home construction is still approximately half of what it needs to be in order to be considered "normal" for this sector.



source: realtormag