Housing shortage a mixed blessing
How many times in your life have you said, “Be careful what you wish for?” Maybe you said it to your kids after they begged for the adorable puppy but forgot he had to be walked several times a day. Or the sports car your husband was dying for turned out not have room for his golf clubs. Or maybe you’ve been overwhelmed in recent years by the number of properties on the market and wishing there were just a few less to choose from. Well, guess what? Your wish has come true.
According to the National Association of Realtors’ report in July, the housing market that just two years ago had a glut of homes is experiencing a substantially fewer number of properties available for sale. Nationally, sales of previously owned homes fell 5.4 percent in June from May of this year. The economists for the NAR are attributing this decline in sales to a sharp drop in the number of homes on the market.
Inventories of single family homes were down 3 percent in June from May 2012 and 24 percent from a year ago. This is leaving housing inventories at about the same levels that preceded the housing bubble bursting. The shortage of inventory ironically is happening at precisely the same time that the economy is starting to show signs of moving in spite of the still weak labor market. Supporting this is a Trulia.com report which is reflecting fewer sales are also in the same areas that are reporting fewer listings.
There are several reasons for this decline in inventory not the least of which are upside down homeowners who simply can’t sell unless and until they are able to accrue some equity in their homes. In fact there are homeowners who may still have equity in their properties but are unwilling to sell at what they consider unacceptable discounted prices.
In addition, the rate of foreclosures that were flooding the market has slowed down substantially since banks have been slower to place them on the market. Investors sensing that the market is at the bottom are buying foreclosure and pre-foreclosure properties as soon as they are listed and instead of flipping them for a profit are converting them into a portfolio of rental properties patiently waiting for the market to come back.
The other big story here is how a decline in inventory is affecting sales price. Obviously the less there is to choose from, the higher the prices will ultimately rise. Nationally the median home prices are up 7.9 percent from a year ago in June for the fourth straight month.
Anna Maria is also enjoying the improvement in the real estate market with fewer properties for sale and, according to the Manatee County Tax Assessor’s Office, an increase in values. As reported in this paper, Anna Maria’s value is up 2 percent, Bradenton Beach’s is up .05 percent and Holmes Beach is up .1 percent.
The perception, true or not, is that we’re at the bottom and everyone wants to buy at the bottom but no one wants to sell at the bottom resulting in a shortage of properties available for sale. If you’re a buyer, what you may have been wishing for is here. It’s easier to make a decision because there is less to choose from. Of course, this is also the bad news, since values are on the rise so getting in at the exact right moment is crucial. Careful what you wish for; you may be living through it right now.
