Original Content by Carl Johnson,
One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy in the Triangle Area? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.
Underbuilding Is a Long-Standing Problem
One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. Based on statistics, for 14 straight years, builders didn’t construct enough homes to meet the historical average underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.
Today’s Mortgage Rates Create a Lock-In Effect
There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. Please note that the well informed buyer knows that they are able to refinance in the near future when there is a possible rate reduction as there usually is in an election year. The cost of refinancing is a cost benefit. With the possible rate reduction the supply and demand is again more demand than supply that we project will make it harder for buyers to have their offer accepted.
Misinformation in the Media Is Creating Unnecessary Fear
Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. Our best advise is to pay attention to the local marketing and ask an expert what is really happening in the real estate market. The Triangle often out performs the national average.
How This Impacts You
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. Whether you are looking to buy or sell a home, we want to be here for you. CLICK HERE or call 919-880-0904 and we can start the conversation on how we will help you reach your real estate goals. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in your area.