How housing inventory is hurting recovery.
The National Association of Realtors has recently reported that raw housing inventory is at a 13 year low nationally. I don’t know if locally (Boise/Meridian Idaho) we are that low as our statistics are not so readily available but we are down to levels I have never seen in 12 years as a licensed broker. Our current inventory in Ada County is one quarter of what it was 4 years ago. I believe this is creating a bit of buyer apathy. I think there is a segment of buyers just staying put, despite the threat of rising interest rates, simply because they feel they cannot make a rational choice with so few homes to choose from.
A lot of these buyers have also been knocked out of contention for homes they do like because of multiple offers and they are getting fed up with the process. Many buyers still have the ‘I will not pay full price’ mindset even when the full listed price is a fair market value (sorry you missed the bottom – this is our new reality). While prices have increased there are still a lot of buyers (basically most anyone who bought in the past 7 years) who are still upside down. As much as many of these home owners would either like to unload investment property or move to larger home or downsize they are stuck unless they are willing and/or capable of writing a check to close.
So where does this leave the housing market? I believe limping along for a few more years until price raise enough for people to get out of their current homes. Many buyers are left to having homes built but this is another possible can of worms I have written about previously. The national news ran a story about the very issue I wrote about months and months ago – there are not enough qualified craftsman around to build the home so in demand. When the construction industry collapsed many of the skilled workers retrained and entered other fields and they are not coming back to construction. This leaves us all with a bit of ‘buyer beware’ hesitation when buying new construction. Make sure you are working with your areas best builders who have a long history with their subs.
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