NUTS & BOLTS THE BIG PICTURE
STRATEGIES: REITs TOM DA A
AGE OF HOUSING STOCKS: 2005 VS 2015
2005
2015
40%
35%
30%
25%
20%
15%
10%
5%
0%
45 YEARS OLD OR MORE
35-45
25-35
15-25
5-15
5 YEARS OLD OR LESS
SOURCE: NATIONAL ASSOCIATION OF HOMEBUILDERS
inconvenience sellers with a multitude of showings. Additionally, because of this same pent-up demand, we are seeing properties attracting multiple offers immediately upon going on the market, adding to the emotional tension of buyers looking to make a home purchase, and further driving price increases across many markets. As homeowners stay in homes longer, we are seeing our national housing inventory increase in average age. This trend is due to the lack of introduction of new home starts to mitigate the pent-up demand of buyers in the housing industry. According to a study conducted by the National Association of Home Builders (see chart on left), “The share of housing stock built 45 years ago or earlier increased significantly from 32 percent in 2005 to 38 percent in 2015. However, the share of new construction built within the past 5 years declined to 3 percent in 2015, compared to 9 percent in 2005.” As our housing inventory across the country ages, so too does the costs of
housing types in July 2017 was $258,300, up 6.2 percent from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains,” as further reflected in recent reports of the National Association of Realtors. The symptoms of higher sales prices across U.S. markets, as well as a low supply of listing inventory limiting sellers’ choices as to what they could purchase if they sold their home, are two critical factors causing homeowners to stay in their homes longer. Real Estate professionals such as Lily Campbell of First Team Real Estate in Huntington Beach are leveraging their relationships and brokerage’s market share of available listings in neighborhoods to identify potential home sellers months in advance of those potential sellers placing their homes on the market. Real estate professionals like Campbell are also leveraging their list of a pent- up demand of buyers to often place the home under contract without having to
AS HOMEOWNERS STAY INHOMES LONGER, WE ARE SEEING OUR NATIONAL HOUSING INVENTORY INCREASE IN AVERAGEAGE. THIS TREND IS DUE TO THE LACK OF INTRODUCTION OF NEWHOME STARTS TOMITIGATE THE PENT-UPDEMAND
Where Has the Residential Real Estate Inventory Gone? “MY TAKE” ARTICLE FROM THE HOUSING NEWS REPORT BY ATTOM DATA SOLUTIONS.
by Michael Mahon, President, FIRST TEAM REAL ESTATE A
s we approach the fourth quarter of 2017, consumers, real estate agents, and real estate brokers are in search of answers to the same question; “where has the available residential real estate inventory gone?” According to housing statistics released by the National Association of Realtors, “at
the end of July 2017, there were 1.92 million existing homes available for purchase across the diverse markets of the United States. This amount reflected an inventory 9 percent lower than July 2016 (2.11 million), and highlights an available residential inventory in decline and contraction, year over year, for 26 consecutive months.”
Straight out of textbooks of universities across the country, providing education of the laws of supply and demand within their introductory economics courses, res- idential housing inventory in low supply means housing prices continue to escalate to settle the appetite of consumer demand. “The median existing-home price for all
OF BUYERS IN THE HOUSING INDUSTRY.”
32 | think realty magazine :: year end 2017
thinkrealty . com | 33
Made with FlippingBook flipbook maker