Many U.S. Communities
Seeing Real Estate
Inventory & Lead Shortage
By Leon McKenzie
U.S. Probate Leads
A
s a professional real
estate investor, keeping
a pulse on the changes
in the market can be the
difference between having a profit-
able year and seeing losses in your
business. Seeing these trends and
knowing how to react to them can be
one of the most critical skills for any
individual working in the property
business.
One of the most pronounced trends
in the market recently has been the
tightening of real estate inventory
and, consequently, a shortage of
leads. This trend has paralyzed many
real estate professionals and prevent-
ed them from finding and making
the deals that will take their business
to the next level. The contributing
factors to this problem come from
many areas. Knowing a bit about
the factors that are causing the issue
will help you to navigate the current
changes in the market.
Alan Heavens of the Philadelphia
Inquirer reported, “Research from
the National Association of Realtors
shows the U.S. needs to build 1.3
million to 1.7 million housing units
annually to keep pace with yearly
household formations averaging 1
million to 1.4 million, in addition
to replacing the 300,000 obsolete
dwellings that are razed each year.
Statistics released two weeks ago by
Freddie Mac, however, show that
only 910,000 units were started in
2008 and 550,000 in 2009. Projected
starts for 2010 are better, but just
700,000 units.”
Decreased construction means
that more homeowners and business
owners are staying where they are in
terms of their location. Homeowners
and business owners who would like
to relocate to a new home or office
space simply don’t have any options
from which to choose. This means
that people are more likely to pursue
the option of remodeling or adding
on space rather than going out into
the real estate market and looking
for a new residential or commercial
property.
Heavens said that it can be chal-
lenging to try to predict how much
space will be needed in any given
year, “Predicting how much hous-
ing is needed involves a complex
calculus that weighs hard statistics
CONTRIBUTING FACTORS
TO REAL ESTATE SHORTAGE
There are a myriad of factors that
may be affecting your real estate
business and your ability to find good
properties – both on the residential
and the commercial side – that will
lead to profits and excellent options
for your portfolio.
(new-home starts, sales of pre-
viously owned homes) against a
certain amount of demographic
tea-leaf reading (household-for-
mation forecasts). Thus, there
isn’t complete consensus on
what will be enough. “At current
levels of housing construction
and demand, the nation has just
about two years’ worth of excess
vacant homes for sale and rent,”
said Moody’s Economy.com
chief economist Mark Zandi.
“Without additional construction,
many homeowners and those
looking for commercial space
may find themselves frustrated.”
Here are just a few statistics
that support the issues with
the current real estate market
according to Heavens:
• “At the current sales pace na-
tionwide, the supply of previous-
ly owned houses would take 7.8
months to exhaust, not including
the vast “shadow market” (hous-
es whose owners are waiting to
sell until real estate recovers) and
“distressed properties” (foreclo-
sures and bank repossessions).
• The inventory of unsold new
houses is at 9.1 months of sup-
Continued on next page
...people are more likely to pursue the option of remodeling or
adding on space rather than going out into the real estate market
and looking for a new residential or commercial property.
Realty411Guide.com
PAGE 67 • 2016
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