12/11/2022 0 Comments Low home inventory![]() ![]() “During the pandemic, a lot of people stopped selling their houses,” says DJ Olhausen, a San Diego, California realtor with Realty ONE Group Pacific. Eager buyers, though, weren’t met with many for-sale homes, and sellers were in some cases gun shy. Record-low interest rates during the pandemic undoubtedly brought out buyers who were excited to borrow money for cheap. How did the pandemic contribute to the inventory shortage? As for the new homes that are coming onto the market, many are outside of most homebuyers’ price ranges, Auerbach says. ![]() On top of all this, companies like Opendoor, We Buy Ugly Houses, as well as home investors who do fixups and renovations have taken down a lot of the available housing inventory, says David Auerbach, managing Director of Armada ETF Advisors, who has more than two decades of experience in the real estate investment trusts industry. “They’re the second-largest buying demographic in history, just a tiny smidge behind the baby boomers.” The average first-time home buyer is 34 years and the average millennial is now turning 35, and as they continue to pour into the marketplace, more homes are needed, he points out. In the last decade, he says, builders haven’t come close to hitting that million home per year mark except in 2021. Traditionally, home builders in this country have averaged about a million homes per year-or at least they should have been, in order to keep up with soon-to-be-needed demand, says Fort Walton Beach, Florida real estate agent Andrew Iremonger with eXp Realty. Price increases for building supplies like lumber and oriented strand board (OSB), a widely used structural wood paneling, are contributing to the extreme bottleneck, according to the National Association of Home Builders. While building slowly started to pick back up, global supply chain issues in the past couple of years blunted the progress. When the housing bubble burst in 2008, a lot of the smaller home builders went out of business, slowing the production of new homes across the country, says Isaiah Henry, the CEO of Seabreeze Management Company, a group that manages commercial and residential properties in California and Nevada. You can trace this housing inventory shortage back to the last recession. Why is there such an extreme inventory shortage? So how did we get to the point where it’s so hard to even find a home to buy, and is there any relief in sight? Ahead, real estate experts break it down. According to a report from, America is short by more than 5 million homes based on the population. The homes that do go up for sale have been flying off the market in record time (often over their list prices), and you keep hearing the same buzz phrase: “There’s an inventory shortage!” If you’ve been house hunting in the past couple of years, it’s probably felt as though there’s a giant “no vacancy” sign hanging in the buyer’s market. ![]()
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