Low inventory-somethings got to give!
I have been selling real estate for over 20 years , and I am truly amazed each morning when I open up the MLS and see either 0 new listings or 2-3 at the most. The big question is what’s going on here as well as across the country?
There are many hypotheses on why there are so few homes for sale today. Here are the five leading theories:
(1) investors bought up too many foreclosures during the bust and are holding them as rentals (especially in our Nyack area)
(2) rising prices have made buying a home unaffordable, (3) owners don’t want to sell if they don’t think they can buy another home
(4) too many home-owning boomers can’t or don’t want to move
(5) owners who want to trade up can’t find an affordable home at the next level.
We found that proponents of each of the five popular explanations aren’t wrong – at least not entirely. The surprising news is that when it comes to relative impact, homebuilding and investor activity are about the only ones that matter – as they had the highest positive and negative impact of the five explanations which I personally find surprising.
The takeaway here is that not all explanations for low inventory fully explain why the national home inventory is at or near historic lows. It turns out the leading explanation for low inventory is that investor activity and a lack of homebuilding are both significant predictors of low inventory. One other thought is homeowners aren’t making any moves until the full implications of the new Trump tax plan are understood.