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? 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.
One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:
For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That 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.
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. The chart below helps illustrate just how many homeowners may find themselves in this situation:
Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.
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. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction.
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
Thank you for joining us in exploring the intricate dynamics of the Telluride real estate market. As we've delved into the challenges posed by the low supply of homes for sale, it's evident that navigating this landscape requires expertise and guidance. If you're considering making a move in the picturesque Telluride, Colorado area, your key to success is connecting with a trusted real estate professional.
At Mountain Rose Realty, we specialize in Telluride real estate and are dedicated to helping you find the perfect home. Our experienced agent, Anne-Britt, possesses an in-depth understanding of the Telluride market, ensuring you have a knowledgeable advocate by your side.
With Anne-Britt's guidance, you'll gain valuable insights into the long-term and short-term factors affecting the current inventory deficit in Telluride. Her expertise will empower you to make informed decisions, whether you're looking for Telluride homes for sale or considering selling your property in this sought-after area.
Don't let the challenges of the housing market deter you from pursuing your real estate dreams. Contact Anne-Britt at Mountain Rose Realty today, and let us help you navigate the Telluride real estate market with confidence. Your future home in Telluride, CO, is closer than you think!