The South Coast Real Estate Round-Up

Inventory Nightmare

In the ever-evolving landscape of real estate, there's a question that's been on many minds lately: "Where did all the houses go?" It's a query that strikes at the heart of housing shortages, affordability challenges, and shifting patterns in homeownership. Recently, a new statistic from Redfin has shed light on this phenomenon, revealing that today, the typical homeowner spends an average of 11.9 years in their home, a significant increase from the 6.5 years reported two decades ago. But what's driving this trend, and what does it mean for prospective buyers and sellers?

One key factor contributing to the longer tenure of homeowners is the changing nature of the real estate market. In quarter 4 of 2021, investors purchased a staggering 26.1% of lower-priced homes, up from 24% the year before. This surge in investor activity has had a ripple effect, further reducing opportunities for owner-occupied single-family home buyers. With investors snapping up properties for rental income or resale, the pool of available homes for traditional buyers has diminished, leading to increased competition and higher prices.

This trend has profound implications for both buyers and sellers. For prospective homeowners, especially first-time buyers or those looking to upgrade, the reduced inventory can make finding the right property a daunting task. With fewer options available, buyers may face bidding wars and inflated prices, making homeownership feel increasingly out of reach. On the other hand, for current homeowners considering selling, the scarcity of listings could present a lucrative opportunity. With high demand and limited supply, sellers may find themselves in a favorable position, able to command top dollar for their properties.

However, it's essential to recognize that while these market dynamics may present challenges, they also underscore the importance of strategic planning and informed decision-making. For buyers, working closely with a knowledgeable real estate agent who understands local market trends and can offer guidance on navigating competitive landscapes is crucial. Additionally, exploring alternative housing options such as townhomes, condos, or new construction developments may provide viable alternatives in areas where single-family homes are scarce.

For sellers, timing and pricing are key considerations. While high demand can work in favor of sellers, it's essential to strike the right balance between maximizing profit and attracting qualified buyers. Collaborating with a seasoned real estate professional who can help stage the home effectively, market it to the right audience, and negotiate favorable terms is invaluable in achieving a successful sale.

Ultimately, the phenomenon of homeowners staying in their properties longer and investors exerting greater influence on the market reflects the dynamic nature of real estate. By staying informed, adaptable, and proactive, both buyers and sellers can navigate these challenges and capitalize on opportunities in today's evolving landscape.

While the question of "Where did all the houses go?" may seem perplexing at first glance, a closer examination reveals a complex interplay of factors shaping the current state of homeownership. From shifting market dynamics to increased investor activity, understanding these forces is essential for anyone navigating the real estate landscape. By staying informed, leveraging expert guidance, and approaching transactions with patience and strategy, buyers and sellers alike can navigate this ever-changing terrain with confidence.

Posted by Christopher Terry on February 16th, 2024 6:10 PM

If you were born between 1946 and 1964 you are considered to be a Baby Boomer. As a group, Baby Boomers were the wealthiest, most active and most physically fit of any generation up to that time.

Are You a "Boomer"?

The term "baby boom" comes from the noticeable post-war birth rate increase. Seventy-six million children were born between 1946 - 1964 and are now entering into retirement years. Although the wealthiest group up until that time, as the baby boomer population rises, income for this group is declining.  Estimate to represent 73 million Americans by 2030, a rise of 33 million in just 20 years, this group is expected to bring about large numbers of lower-income adults causing concerns for home ownership and housing. In a Harvard Joint Center for Housing Studies it is expected that baby boomers earning less than $15,000 per year will rise 6.5% to 6.5 million. The majority of low-income baby boomers are already living in housing that is deemed "unaffordable" and in time this will only increase. This could mean that millions way be forced to rent or worse, default of payments and then not be able to find and obtain affordable housing and living.

What to do? 

It's not like we can't see this coming, but what can be done? I don't have the answers but I do believe change starts with us. I have met and spoken with developers who have tried to create developments that cater to this demographic but without greater support from the public few developers are willing to take on such risky and expensive endeavors. As "Baby Boomers" age into retirement it is our obligation to work towards ensuring they have a safe and affordable place to living and enjoy their "golden years".

Your Ideas, Comments and Feedback are Welcome.

Christopher Terry is a licensed real estate broker in Ma and RI, has completed the Accredited Buyer Representative Certification, is a graduate of the Certified Distressed Property Institute, holds the prestigious CDPE designation, is a 4-Time winner of the Master Sales Society's 5/50 Award and is the founder of EZ Home Search Real Estate Inc.
Posted by Christopher Terry on April 21st, 2015 6:26 AM


My Favorite Blogs:

Sites That Link to This Blog:

E Z Home Search Real Estate Inc.