Still Not Enough: Realtor.com Reports Fall House Hunters Remain House-Hungry
By: Charles Sells
If you thought that the crisp, fall air might bring some cooling trends to your local housing market, you thought wrong. Fall house hunters report that there are still not enough single-family residential properties available for their hungry, would-be-homebuyer hearts. In fact, according to the National Association of Realtors (NAR), October numbers indicate that despite 44 percent more home sales pending now than there were in 2019, unsold inventory nationally has just a 2.4-month supply available. Traditionally, “healthy” inventory would be between five and six months’ worth.
Taylor Marr, Redfin deputy chief economist, explained, “Comparing today’s sales and new listing numbers to the 2019 levels helps reveal the stark shortage of supply we are facing.” Compared to 2020, October 2021 posted a housing inventory down 13 percent. Marr added, “The boost of housing supply that came on the market during the summer has already faded away, even as demand tapers off as we expected it to in the fall.” He concluded that if one considers 2019 the last “typical” fall on record, 2021 demand remains “steady and strong” with “increased urgency” as many buyers believe this may be their last chance to get a mortgage before interest rates start to inch upward.
While some analysts predict that the housing market will soften further at the end of the year when some federal eviction and foreclosure protections expire, others say that the number of homes likely to hit the market in a distressed manner is expected to be very low. After all, with inventory this tight, a homeowner just entering the foreclosure process in January is likely to feel relatively little pressure to vacate quickly; this is not 2007 or 2008 when many people did not realize that foreclosure is a drawn-out process. While some homeowners may lose their homes, they are more likely to realize they have time to sell – and even sell at market value rather than at a discount – than they were in the mid-2000s. This is good news for the solidity and stability of the housing market, but it means that real estate investors waiting for the market to “turn” in order to scoop up properties may have to wait a while longer. Unless you are working with an established operation with many sources of leads on deals in a market, you are unlikely to find a lot of buy-low-sell-high opportunities in 2022.