Looking to buy a home? Get a Full Home Search
Looking to sell your home? Free Home Price Evaluation
Today I want to address a major issues affecting our entire real estate market in Southern California and the nation as a whole. Why aren’t there enough homes available?
“
”
Low inventory has become a nationwide trend.
”
We have mentioned many times that for a neutral market in the SFV, we need at least 7,000 homes available for sale. We currently have a total of 2,400 homes, and it has been this way since December. There are a few reasons for this massive decline in inventory.
- Interest rates are incredibly low, and they are still under 4%. Buyers have taken advantage of this and have bought up many homes.
- Small time investors and institutional investors are also gobbling up homes right now. This inventory is being rented out and they’re making a lot of money, so it simply doesn’t make sense for them to sell these properties.
- We have a sustained low interest rate environment. This means that many people have refinanced or locked in ultra low rates. This means that it is unlikely for these homes to come onto the market anytime soon.
- There aren’t a lot of places for the move up-buyer or for the downsizing buyer to move. This means that they’re staying in their current homes until the market improves for buyers.
- The recession has caused a lot of stunted development over the past few years. Not as many new homes have been built, and this has put pressure on our inventory levels.
- Population growth and job growth in Southern California have increased the amount of people who need housing, and this is putting extra stress on the availability of homes.
The supply of homes in the entire United States is 8.6% below what it was last year. This has also caused home values to increase by 4.2%. Low inventory and high demand will inevitably push prices higher in Southern California.
No comments :
Post a Comment