With home inventory at record lows and property values increasing significantly over the past few years, you might be wondering if it makes sense to wait until things calm down to buy a home. The media would have you believe that we are in another 2008/2009 scenario where the market might crash. The reality is that the housing market is radically different from back then. Let’s look at what we’re facing today:
- In 2007 at the peak of the housing market, there were 3.7 million homes on the market in the US. Today, that number has fallen to 850,000 in 2022. They say a healthy housing market would have a six-month supply of homes based on current demand and right now in the US, we are 1.8-month supply.
- Since 2009, home builders have not been supplying enough inventory to meet the current demand. Their estimates have been short by approximately 5.5 million homes. Additionally, today, builders are challenged with too few workers, supply chain constraints, and high land costs. This will continue to constrain supply and increase home prices in the coming years.
- Rent prices continue to skyrocket. In Atlanta last year, the price of a two-bedroom apartment increased 13% on average. It’s almost as hard to find an appropriate rental property as it is to buy a house.
- Private equity groups are taking advantage of the rental market with prices increasing and are even going as far as buying land to build entire subdivisions just so they can rent them out now to make profits. These powerful groups with their seemingly endless capital are overbidding and paying all cash for the only available home inventory we have, making it more challenging for the average homebuyer to compete.
- In 2022, the average first-time homebuyer is 33 years old. According to a recent study by the pew research group, 52% of adults aged 18 to 34 are still living with their parents. However, this group will eventually have to relocate and whether that’s buying a home or finding one to rent, this will continue to add significant demand to housing inventory going forward.
- People are holding off on buying a house because they don’t believe that they can find a suitable replacement for their current living situation. This is also adding to the supply problem.
The bottom line is that this will continue to add pressure on the supply/demand dilemma for the next several years. This presents a wonderful opportunity for first-time homebuyers because prices will continue to increase. For anyone else that really wants to make a move, we now have tools to allow you to make an all-cash offer so that you can stand out above the crowd. In addition, if you need to sell your home first, we have a company that will buy the new home for you and rent it back to you for up to six months until you can sell your existing home. We are helping many families make the transition successfully, so give us a call to find out what your options are and how we can help your family!
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