Any time you start talking to people about buying homes and current home sales trends one of the things that everyone notices is that existing home sales are down.
Why aren’t people selling existing homes?
The answer is a bit complex. The short answer is because there just aren’t as many as there have been in the past. After the massive overbuild of the housing boom that ended in 2007, the bursting of that bubble led to very little construction.
Many people who were able to hang onto their homes through the mortgage crisis are settled in. Younger folks are still raising their children in their homes. Older folks are still paying off their mortgages, but they have a lot of equity that they don’t want to have to move around.
So, the combination of a large group of people who are settled and an extended period of slow construction has led to a shortage of existing homes.
Marry that to a slow restart of new home construction and a strong economy and you have a perfect storm for a housing shortage. It hasn’t reached crisis proportions and is unlikely to, but it is a small crisis. Currently, the market is ramping up construction on new residential housing, so we may start to see pressure released off of the existing home market.
If you’re looking for an existing home, your best bet is to be patient. Home prices are rising, but slowly. Interest rates are increasing, as well, but very slowly. If you don’t want a new home, take your time and keep your eyes open. Demand might be high and you might need to pay more than the asking price, but you will get what you really want.