Has the Housing Shortage Begun?
If you’ve been receiving our communications, you know that we’ve been forecasting a housing shortage. Yet amidst a cyclical downturn, factors pointing towards an upsurge are beginning to take shape.
First, the number of echo boomers aged 25 to 44 will eclipse the number of baby boomers when they were those same ages by more than 5.9 million,” according to a Harvard study. “With the number of households in this age group projected to increase between 2.0 million and 3.4 million, the demand for rentals and starter homes will surge,” the Joint Center says. Born from 1981-2000, members of the echo-boom generation are going to lead the resurgence in housing demands.
Second, the number of released foreclosures in the market is still being controlled by banks feeding into the shortage of available properties. Investors continue to act quickly on properties left behind by the favored “owner occupied” status of Freddie and Fannie foreclosures. Some experts say that the investor’s appetite for foreclosures could still be absorbed even if the banks do release all their inventory.
Third, interest rates and housing affordability are driving more people in the market. Although some sellers might not be getting exactly what they want out of their homes, current interest rates and prices are making up the disparity on a new purchase. Increased prices will follow as we see bidding tactics of 2006 coming back into play. The 3 and 4 offer scenario is becoming more prevalent as sellers are hoping to recapture more of their lost equity over recent years.
2 and 3 years ago we were advising many sellers to stay put because of their equity positions, today we are revisiting with many of those same sellers and advising that NOW is the time! Call us today for a personal consultation and let us evaluate the reality of today’s market to your situation.