2018 Real Estate Game Changer #3: INVENTORY
Finally, we have data showing the housing supply catching up with housing demand. After so many years of a severe shortage of homes for sale what we see is towards the middle of 2018 that will all change and the shortfall will finally ease. While the beginning half of 2018 still looks to be challenging for some buyers that growth of inventory should start to show itself towards summer. That is a huge development for so many who have wanted to buy but have been frustrated in their search in finding a home that fits what they not only need but also is in budget.
Buoyant construction is the engine that will be turning this ship in a new direction. Bringing newly constructed homes into the real estate market and opening up new opportunities for people to trade up when buying a new home. It is increasing inventory not just moving people from one place to another in already existing houses.
It should be noted though, first-time buyers of starter homes may have to still sit and be patient for a little longer. While relief is predicted for the mid-range defined in this market as homes priced between $350 – $700k, it will take just a bit to make its way down to the lower tiers. Most specifically you will see growth in the mid-range tiers with prices ranging from three hundred and fifty thousand and higher.
As the real estate inventory increases, the costs of homes are also expected to slow to 3.2% growth year over year nationwide. Again, though we find it will be higher-priced houses that will come under pressure with price reductions since the inventory in the $1.4 million range and higher has increased drastically since September of 2016. As we talked about before, it looks like it will get a bit worse before getting better for new and starter home buyers, especially those looking at mid-priced houses.