Home shoppers across the country are starting to face an unexpected problem when they visit their chosen real estate agent: they’re finding fewer and fewer properties for sale. A number of factors are contributing to this phenomenon:
1) Currently, 25.4% of homeowners in the US are experiencing negative equity, meaning that they owe more on their home than it is presently worth. This represents around $950 billion in unsecured mortgage debt spread across 13 million homeowners. It is often difficult to successfully complete a short sale, with transactions experiencing lengthy delays awaiting bank approval, and many are unsuccessful. These homeowners are often stuck until conditions improve and they manage to experience some kind of positive equity.
2) Those homeowners who can sell are often reluctant to do so in the present market. In many markets, prices peaked in 2006 and 2007, and present prices are still as much as 25% or more below that mark. These lower prices mean that they are likely to take a loss that they may be unwilling to take.
3) Homeowners who want to move are unwilling to list their home just yet, as the talk of a housing shortage suggests they may not be able to find a place to live when they manage to sell their current home.
These trends signal a growing concern among economists and realtors. It is estimated that, from 2001 to 2012, only 15.7 million new houses were built, while more than 16.8 million units were in demand, factoring in household formation and replacement of demolished units. In 2013, it is estimated that demand will increase by another 1.4 million, while housing starts will be at around 1.1 million. Not only does this not meet current demand, it does nothing to eliminate the existing deficit.
While several experts have suggested that home prices are still on the verge of dropping once more, given factors such as increased mortgage rates and investors deciding to release their inventory in the face of increasing home prices, others are saying that these issues mean little in the face of a more than 1 million unit shortage that is already affecting the market.
Here at Property4Prosperity, we agree that the upcoming housing shortage presents a cause for concern among homebuyers. That is why we are encouraging our investors to keep obtaining turnkey properties with us while there is still available inventory to choose from. Prices remain low in many areas, but are poised to increase as the economy recovers and demand returns. Now is the time to invest and take advantage of the available deals before the housing shortage makes it more difficult to enter the market.
To Your Financial Freedom,
Chayot Ing-aram
BBS (Hons) & MFin
Co-Founder
Property4Prosperity
1) Currently, 25.4% of homeowners in the US are experiencing negative equity, meaning that they owe more on their home than it is presently worth. This represents around $950 billion in unsecured mortgage debt spread across 13 million homeowners. It is often difficult to successfully complete a short sale, with transactions experiencing lengthy delays awaiting bank approval, and many are unsuccessful. These homeowners are often stuck until conditions improve and they manage to experience some kind of positive equity.
2) Those homeowners who can sell are often reluctant to do so in the present market. In many markets, prices peaked in 2006 and 2007, and present prices are still as much as 25% or more below that mark. These lower prices mean that they are likely to take a loss that they may be unwilling to take.
3) Homeowners who want to move are unwilling to list their home just yet, as the talk of a housing shortage suggests they may not be able to find a place to live when they manage to sell their current home.
These trends signal a growing concern among economists and realtors. It is estimated that, from 2001 to 2012, only 15.7 million new houses were built, while more than 16.8 million units were in demand, factoring in household formation and replacement of demolished units. In 2013, it is estimated that demand will increase by another 1.4 million, while housing starts will be at around 1.1 million. Not only does this not meet current demand, it does nothing to eliminate the existing deficit.
While several experts have suggested that home prices are still on the verge of dropping once more, given factors such as increased mortgage rates and investors deciding to release their inventory in the face of increasing home prices, others are saying that these issues mean little in the face of a more than 1 million unit shortage that is already affecting the market.
Here at Property4Prosperity, we agree that the upcoming housing shortage presents a cause for concern among homebuyers. That is why we are encouraging our investors to keep obtaining turnkey properties with us while there is still available inventory to choose from. Prices remain low in many areas, but are poised to increase as the economy recovers and demand returns. Now is the time to invest and take advantage of the available deals before the housing shortage makes it more difficult to enter the market.
To Your Financial Freedom,
Chayot Ing-aram
BBS (Hons) & MFin
Co-Founder
Property4Prosperity