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The Catch-22 of Low Housing Inventory
Entering this spring we're seeing extremely low housing inventory in the local area. The question is why?
There are the usual answers which seem very plausible. Winter weather conditions were a bit harsh with plenty of rainy days which disuaded sellers from putting their home on the market. Road conditions were difficult, making everything difficult. Interest rates have inched up a bit reducing buying power.
However, all indications are there are many people ready to move, whether it is up or down or sideways.
So what else could be causing the low inventory?
One major problem, the Catch-22, is that sellers don't have a place to go. Sellers typically also need to buy there new home and with such a limited selection their options are limited. So what are they doing? They are staying put with no way to move forward. With limited inventory sellers can't buy, so they've decided not to sell until more inventory shows up, which can't happen until their peers in the market, other sellers, decide to sell.
How does this dilema solve itself? Eventually, and probably quite soon, many sellers will need to put their home on the market and can't wait any longer. Either their family has grown, or possibly they've become empty nesters, or they need to relocate. One way or another it is a temporary apperition.
With the sun, warm weather, and end of the school year approaching I expect the inventory bubble to burst, so buyers, especially first time buyers, will have their opportunity!
In the early part of the inventory transition level I expect to be fairly stable, but as the ball gets rolling, barring other market influences, I expect to see mild gains in value.
So whether your a buyer or seller you might consider getting in earlier.