Although more homes are available for sale now compared to this time last year, the number of buyers still outpaces the houses on the market. If you’re thinking about moving, this could be your moment to make your house stand out.
There are several factors behind the housing shortage, and understanding them can help you see how the market is in your favor if you’re ready to sell.
What’s Behind the Shortage?
- Underproduction of Homes: For years, the housing industry hasn’t built enough homes to meet demand. Zillow explains:
“In 2022, 1.4 million homes were built — the highest number since the early stages of the Great Recession. However, the U.S. added 1.8 million new families that year, meaning construction didn’t even keep pace with new households, let alone start addressing the existing housing deficit that’s been driving up prices for over a decade.” - Rising Costs: Building materials, labor shortages, and supply chain disruptions, worsened by the pandemic, have made it more challenging and costly to build new homes, slowing construction in many areas.
- Regional Disparities: Some regions are feeling the shortage more than others. Popular areas are seeing a higher influx of people, but home construction isn’t keeping up. Job growth often outpaces new building permits, making these markets even tighter and driving up prices.
The Scope of the Problem
Experts estimate that the U.S. faces a housing shortfall of about 3.3 million homes. As the graph below illustrates, we’re far from meeting current demand.
Looking ahead, John Burns Research and Consulting (JBREC) predicts that over the next decade, the U.S. will need around 18 million new homes to accommodate future demand, including new households, second homes, and replacements for aging properties.
So, while there may be more homes for sale compared to last year, the overall supply is still far from enough. This presents a prime opportunity if you’re considering selling.
Key Takeaways
If you’re thinking of selling, the shortage of homes means your property is likely to attract significant attention. It will take years to address this inventory gap, and with competition for homes still strong, prices continue to rise, creating a favorable environment for sellers.
Since market conditions vary by location, it’s crucial to work with a real estate agent who knows the local trends. They’ll help you price your home correctly and develop a strategy to reach the right buyers.
Bottom Line
While inventory has increased slightly since last year, the overall shortage persists, putting sellers in a strong position. Contact M&J Realty Group who can help you make the most of today’s market.
Source: Keeping Current Matters