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Housing Hide and Seek

Housing Hide and Seek

April 3, 2019 Community 0

If you’ve been looking for a house to buy or rent lately, you already know we have a shortage of available homes to purchase.  Today, I want to give you my theory of why we have the shortage in the first place.

I believe the shortage is a combination of three primary reasons. First, during the downturn and the foreclosure crisis many homes were purchased by investors and turned into rental properties or flipped for quick cash.  Because there were so many of them available, they were cheap and people who had money or had access to it scooped them up.  This in turn limited the number of homes now available to be purchased. Normally, people who buy homes to live in them move on an average of 7-9 years.  Investors, however, don’t and are still holding large inventories of rental properties.

Second, one would think that with all the homes being turned into rentals then there would be lots of home to rent.  Unfortunately, there isn’t because the Millennial generation is now reaching adulthood and are looking for homes to purchase and to rent for themselves.  Why is that such a big deal?  Well, the Millennials are now the largest generation ever.  They are even bigger than the Baby Boomers.  There are simply more adults wanting homes of their own than ever before and more than what is available. 

Third, during the downturn and financial crisis, there was actually a net loss of homes available.  There were basically no homes being built over several years and the number of standing homes actually dwindled due to fires, natural disasters, neglect and any number of things. So while the Millennials grew up, the number of homes shrunk.

For a bonus, I’ll add a fourth reason.  As the economy was struggling to gain traction, many people simply choose to remodel their current home rather than move.  This caused many of them to hold on to their homes longer than they have in the past.

Each of these, separately, would be hard enough on the available homes but combined they have made it real tough to find a good home.

Fortunately, that tide has been changing as the economy has been going strong now for a couple years and homes are being built and inventory is picking up.  As mentioned in my last post, this has created some great opportunities for people wanting to sell their home as demand and prices are up.  People wanting to build their homes are looking for available land as well.

When are you planning on moving?  Need help finding a builder or a lot to build on?  We can help take out the confusion and help you move on with your life.  Give us a call.