Steadily for the past year, homes for sale in America have been falling and it looks as if the problem is getting much worse going in to spring 2017, as demands for homes are increasing.
"The inventory is reaching historic lows. It's never declined faster than it did last month. It's freaking us out — it's affecting our business; it's limiting our sales," said Glenn Kelman, CEO of Seattle-based Redfin, a real estate firm. "We're going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch."
With that said, Kelman thinks of Redfin more as a technology company that pushes the ability to closely track more than 80 metropolitan markets. He points the finger at a new dynamic in housing, causing the lack of inventory.
"It's a new landlord nation where everybody is renting out their basement. When somebody moves up they don't sell their old place, they rent it out to somebody else, and it's because they want to keep that 30-year mortgage for 30 years, and it's because they can easily find somebody on Airbnb who will take the place," Kelman said.
Since Redfin began tracking the market in 2010. They’ve claimed that homes have sold quickly in the month of April. A typical home went under contract within just 40 days which is 10 days faster than April 2017. This showed that 1 in 4 homes were sold above their list price, making that percentage the highest recorded by Redfin.
The price of homes is continuing to increase as well but, "It's not a bubble," said Kelman emphatically, who cites tight credit as keeping the bubble at bay.
Compared to just last year Inventory of homes for sale fell about 7% throughout the U.S. in March, according to NAR. Just like many others, Kelman blames the issue on a lack of new construction. For single-family homes, homebuilders are putting up 18% fewer homes than the 25-year average.
"Cranes fill the sky in every town, but they're building office buildings," he said, noting that while employment is going up, there's no commensurate increase in the number of houses. In fact, he added, when people do construct housing, they're opting to build apartment complexes because tight credit is keeping many would-be buyers out of the market. "There is so much demand in terms of rent that it doesn't make sense to build properties for sale."
In summary, if you are looking to sell your home soon, act now as inventories are low!
Contact me to find out what your home is worth in this seller’s market. How much is your home worth?
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