During COVID people stayed home to work and didn’t go into the office. In doing
this, they realized they may not have to live where they were currently located or they
decided they needed to change their living quarters to something that would work better,
such as adding a room for an office or exercise room. Also, the interest rates were
historically low.
Now the housing market has changed. Interest rates are double what they were
just a few years ago. In addition to that, the new buyers know what they want, have
been saving so when that house comes on the market, they pounce on it! Leaving the
first-time home buyer in the dust.
Finding skill workers that will work is a challenge for the builders. It was at one
point the supply line, now that has been pretty well fixed, but finding the skilled workers
which will work, has been tough.
In addition, the seller doesn’t have a trade-up opportunity. If they sell their home,
they need to find a home for themselves and that may mean they will have to have a
mortgage. Leaving a 2.75% rate for one over 7% isn’t very welcoming to the seller. Or,
they will need to sell their home for enough to purchase their next home all cash. That
may not be real for most sellers.
All in all, you have builders building, but not at a rate to keep up with those
wanting a home. Interest rates are higher than they were so the new buyer is a bit slow
in wanting to purchase, but if they have been on the sideline for a bit, they have saved
up and will venture out once that right home comes on the market. And then you have
the seller not too excited about putting his home on the market if he isn’t able to move
on to his next home with ease.
So, there isn’t just one reason as to the why the housing inventory is so low,
there are several that have hit the housing market all at once over time. The outlook is
we will see the inventory struggling for a bit longer. Prices for homes will continue to go
up, but not at the rate they were. For that renter/first-time home buyer, they need to
look at paying the higher interest rate of 7+% is better than paying 100% renting. One
can always refinance when rates move down, but meanwhile they are in a home and
not renting. But they need to get all their paperwork in and ready to move once the right
home comes on the market.
For the seller, who then also has to purchase another home, he needs to look at
what is right for them, and can they afford it.
As one can see as a realtor we have the information, but we don’t have that
crystal ball, well, at least I don’t have that crystal ball! But I am here to help guide you
through that decision of purchasing or putting your home on the market. Give me a call
so we can chat to see what is right for you.
Mary Cockburn
505-639-2090
MaryCockburn.Realtor@gmail.com
