Housing Shortages Plague Market
Daily Real Estate News | Tuesday, October 23, 2012
Buyer demand is up, but there aren’t enough homes available to buy, according to the National Association of REALTORS®, which blamed a recent drop in home sales on a diminishing inventory of for-sale homes.
“Recent price increases are not deterring buyer interest,” notes Lawrence Yun, NAR’s chief economist. “Rather, inventory shortages are limiting sales, notably in parts of the West.” For example, sales of homes priced under $100,000 in the West have dropped 47 percent from a year ago.
Home owners are not putting their homes on the market at a high enough rate to offset the drop in distressed volumes, CNBC reports. Distressed sales have made up more than one-third of home sales in the past two years, but more recently has only made up about 24 percent of total home sales.
Besides the drop in distressed homes for-sale, many home owners are still continuing to wait out the market to recover more equity in their homes before they try to sell.
Yun says that home builders need to increase construction in order for home sales to recover more and to meet the demand for houses. Housing starts have risen 43 percent compared to a year ago, but levels still are only about half of what is considered normal for the sector.
Source: “Is There a Housing Shortage?” CNBC (Oct. 19, 2012)