The vast majority of agents around the country – and their buyers – are bemoaning the limited inventory of homes to buy. The reasons for this are many including:
1. The US has been under-building by millions for over a decade.
2. Most builders have focused more of their efforts on more expensive, more profitable homes.
3. Tons of Cheap money – and borrowing – has allowed people to pay more and fuel excessive price escalation in areas causing huge demand.
4. Institutional investors and i-buyers are competing with ‘regular’ home buyers further depleting inventory.
5. Wealthier buyers buying multiple homes. One person owning 3 homes equates to two fewer homes for other buyers to buy.
6. COVID-fueled migration from more expensive areas to cheaper areas of the US has driven prices up in those areas with increased demand AND buyers comfortable paying much more than locals.
7. Vast new wealth created from rapidly rising equity markets, crypto speculation, IPO’s, new business creation, inheritance, wealth transfer, etc has created a huge new pool of buyers, many armed with cash.
8. The COVID fueled desire to nest and own a home has unleashed the largest buying audience – millennials – to buy instead of rent after years of holding back.
9. Empty nesters seeking smaller homes are competing with first time buyers for smaller homes.
10. COVID fueled a greater awareness of our mortality fueling the desire to get on with life.
In some areas the inventory ‘on the market’ is very low. But there is quite a bit of inventory trading that barely makes it to market – if at all – because it is sold before it comes to market. That inventory is not registering clearly. Off-market deals are growing and they are mostly not pocket listings. The vast majority of these deals trade with both a buyer and seller agent.
It is for this reason – now more than ever before – for eager buyers to work with a professional, connected agent who knows inventory and the agents in their community extremely well. Betty Broker who knows Adam Agent well can help buyers achieve their goals now more than ever.
The Dinsmore Group would like to give content and writing credit to Leonard Steinberg @theleonardsteinbergteam. He shares his valuable insights through his wonderful Compass wide journal, Compass Contemplations. Mr. Steinberg holds the esteemed title of Chief Evangelist at Compass.