Low inventory, demographic shifts, and rising prices will cause frustration this spring and summer Rising real estate costs, demographics shifts, and low inventory have hamstrung homebuyers for years. But according to Danielle Hale, chief economist for Realtor.com, this spring buying season may bring buyer frustration to a boil.
?I think it?s fair to say this is the most competitive housing market we?ve seen in recorded history,? says Hale. ?There?s record low inventory and strong interest from buyers in getting into the housing market. There are a lot of buyers, and not a lot of sellers.?
According to Hale and other economists and real estate industry observers, many factors have created this ?imperfect storm? of high demand and low supply. Underbuilding had been a key factor, due to cost, labor shortages, and zoning and regulatory barriers to new construction. ?We?ve been paying the bill for underbuilding for some time, and every year, it gets worse,? she says. ?We?re not only not keeping up, we?re falling further behind.?
This shortage?inventory has decreased for 42 consecutive months and is down 8.5 percent from last year, according to Realtor.com data?comes as demographic trends conspire to create even more competition.
Millennials are reaching prime homebuying age?in 2020, the greatest proportion of that generation will be turn 30?just as baby boomers are looking to downsize. This has created especially fierce competition for smaller homes, the type of start...