Homeowners Staying Put Creates a Limited Supply
FINDING LEADS IN A ROCKY REAL ESTATE MARKET LEON MCKENZIE
Falling inventory is causing home prices to shoot up higher and faster than most analysts anticipated.” 1 These tectonic shifts in the market are forcing real estate investors to look elsewhere, as the traditional market simply doesn’ t offer the deals that were once available.
The market will continue to see challenges as the winter approaches in most areas. Yun continued by saying,“ As winter approaches, inventory will slide further. Few homes are newly listed after Thanksgiving. Historically, inventory tends to be 15 percent lower in winter than summer. Last year’ s seasonal decline was even more dramatic, at 25 percent. We hope we won’ t see an inventory decline of that magnitude this winter. Home values rising much faster than income growth will markedly cut into housing affordability.” 2 Housing affordability is a problem not only for the family that is looking for a new home, but for investors who want to add to their portfolio. Many leads simply won’ t work with high prices and challenges with decreasing supply and demand.
Homeowners Staying Put Creates a Limited Supply
Another change in the market that is causing a decrease in viable real estate leads is that many homeowners are simply staying put in their current homes. The market is seeing decreases in the building of new construction and the banking industry’ s unwillingness to lend to as many people as pre2008 means that many homeowners are staying in their current homes. This is augmented by the fact that so many homeowners are underwater with their mortgages. Avi Gupta said,“ With record low housing inventories, finding homeowners that are in a position to sell( and may not even know it yet) has become critical to the success of real estate agents, not to mention the housing market as a whole. Many homeowners aren’ t aware of the rapid shift in the market, and others are still leery about what is ahead. Low inventory is causing the housing market to stutter... Buyers are out there, but sellers are hiding." 3