I'm sure you've heard someone in the real estate industry say it.
"Inventory is low."
"There's a housing shortage."
Top real estate agents know it's a problem. Buyers looking for houses for sale in Florida know it. If you're thinking of selling your house, you really should know it. We are experiencing a housing shortage.
Why Inventory has been shrinking.
New Home Construction Fails to Keep Pace
Housing starts have been constrained post recession due to shortages of land, labor, and materials.
Housing starts will total 1.3 million in 2019,
but the 50-year annual average is 1.6 million (1).
The Aging Housing Stock
As homes age, they will either need to be either remodeled to remain in the pipeline or town down and replaced. If not, inventories will lessen over time.
The Median age of a U.S. home in 2016 was 37 years.
Over 50% of owner-occupied homes in the U.S. were built before 1980 (2).
Millennials have overtaken baby boomers as the largest U.S. adult population, and they're starting to buy homes.
In 2019 there are 73 million millennials compared to 72 million baby boomers (3).
Homeowner Tenure Grows
Homeowners are staying put longer.
The average tenure of homeowners who sold this year
has been a record high of 8.3 years (4).
Homes Turned Into Rentals
During the housing crisis, investors snatched up single-family homes in foreclosures and converted them to rentals.
The growth in single-family rentals from 2007 to 2016 was 31% (5).
(1) National Association of Realtors Housing Shortage Tracker
(2) National Association of Home Builders NAHB of data from the 2016 American Community Survey
(3) The Pew Research Center
(4) ATTOM Data Solutions
(5) U.S. Census