The market slowdown from COVID is finally far in the rearview mirror as the real estate market roars ahead. Home values are up. Home sales are up. Distressed sales (foreclosures and short sales) have fallen dramatically.
However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout the winter, supply is not keeping up. Here are the thoughts of a few industry experts on the subject:
“Extremely limited supply is stopping the market from reaching its full potential, counteracting positive increases in market fundamentals, such as employment and wages.”Mark Fleming, PhD. Chief Economist at First American
“Overall, the fundamental trends we have been seeing all year remain solidly in place as we enter the traditionally slower sales season, and pent-up demand remains substantial as buyers seek to get a home under contract while rates remain so low.”Jonathan Smoke, Chief Economist at realtor.com:
“Healthy labor markets in most of the country should be creating a sustained demand for home purchases. However, there’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold.”
“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”Lawrence Yun, Chief Economist at NAR: