A Builders Perspective… A realistic look at housing inventory.
Posted May 24, 2021 in Real Estate Trends
Currently we have 2 weeks of housing inventory on the market. TWO WEEKS!!
An equilibrium between buyers and sellers in homes available in our market is about 6 months of inventory. (To give you an idea, the peak of the last recession we had 18 months of inventory). I get asked often as to why this is happening. I will share with you my perspective.
Last year, the Governor deemed our industry (new home construction) nonessential. We were shut down with no idea when we could open. It turned out to be about 90 days. This caused developers / builders to hold off on their developments.
Our business is much like that of a farmer—plant your crops in the spring—harvest them in the fall. We lost our season last year for which we are seeing the impact now of a lack of lots available. Less lots, less homes available.
It used to be that people would stay in their homes for about 7 years. Now it is over 10 years. This means that the existing home market provides less inventory every year as people stay in them longer.
We live in a growth market. More people are coming here than leaving. That trend will continue, adding more pressure on housing.
There is no doubt in my mind that we will be in a seller’s market for a minimum of 2-3 years (barring any crazy macro-economic events). People will continue to want to move here, people will live in their homes longer and homebuilding is constrained by both the labor to build, land availability and the lengthy entitlement process to be able to add enough supply to make a difference.
Our model home is open 12-4 on Saturdays and Sundays. Check our website www.quailhomes.com for its location. We are following all the safety protocols and have plenty of PPE supplies on hand. We hope to see you make a visit.
If you are thinking about downsizing…. Consider Quail…. you have earned it!!
I hope this helps and thank you for reading the newspaper.