One of the key indicators of a supply shortage in any industry is the number of months it would take to exhaust current inventory. While housing inventory typically fluctuates with the seasons, it’s clear that we’re on a much longer downward trend during the COVID pandemic.
Low Interest Rates
Low interest rates are great for homebuyers, but they also make it easier for homeowners to keep their current homes and buy another, rather than selling. Over the last decade, an estimated 7 million properties have been taken off the market by homeowners and businesses investing in rentals. This is evident in the success of rental companies like Airbnb and VRBO.
Aging in Place
More and more Baby Boomers who bought low decades ago are choosing to stay in their homes and “age in place” – especially in the uncertain age of COVID. With prices soaring across California and the nation, where would they move?
Coming of Age
Meanwhile, the largest generation in history, Millennials, is about to hit the median age of a first-time homebuyer. That means an even greater strain on an already limited inventory and a fiercely competitive market into the foreseeable future.
We’re Not Building Enough
Ever since the housing bubble burst 12 years ago, homebuilders have slowed their pace and become more risk averse. According to Census data, an average of 1.5 million homes have been built each year in America since 1959. However, over the past decade, the pace has slowed to just 900,000 homes a year. Limited production, coupled with enticingly low interest rates and a generation of first-time homebuyers all combine to exacerbate the crisis.
Housing Policy
The CARES Act foreclosure moratorium has kept financially distressed homeowners from selling, but foreclosures were already at record lows before the pandemic. In fact, according to a recent report from CoreLogic, U.S. homeowners have seen their equity increase by $1 trillion since the third quarter of 2019, an increase of 10.8% year over year. So, even with 2.5 million homeowners in the mortgage forbearance program, we shouldn’t expect a wave of foreclosures when the moratorium is lifted.
Considering a move to Lake Tahoe? Recent real estate market stats show that it pays to head south. While house and condo prices are on the rise across the board, South Lake Tahoe remains a relative bargain for anyone hunting for a home. Send us an email to learn more about our first-hand experiences.
The latest numbers are in, and while house inventory was down in November from one year ago, properties are spending less time on the market and selling 21% higher than 2020. Meanwhile, there are a few more condos out there than the same time last year, but the median price is still up 17%.
Empowered by low interest rates, a record number of home buyers found their forever homes. 31% of all home buyers were first-time buyers, and 92% of agents agree low interest rates continue to boost buyer demand. According to the National Association of Realtors, the median price of a U.S. home was $356,700 in 2021, a 14.9% increase from one year prior. 53% of agents report that inventory in their market is rising modestly as of Q3, and 76% of agents say homes may get multiple offers but with fewer bids per home.
Nationwide, 95% of agents report it’s still a seller’s market, no matter where you look. 46% of agents say buyers will use savings from simplified living during the pandemic to afford homes in the current environment, while 45% of agents are seeing buyers turn to relatives or generational wealth to fund their home purchases. 37% of agents have seen buyers liquidate gains in stock market wealth to put toward a home, and 64% of agents in the Pacific region have seen a recent increase in ADUs/in-law units thanks in part to newly reduced regulations.
As we celebrate the holidays, we want to express our appreciation for you and all of our clients. From Santa Rosa to Santa Cruz, thank you for choosing us to help you find your place in the world. Please reach out for insights on your next move, and never hesitate to provide us with a referral!
