The home-building industry continues to struggle through the worst downturn on record. February reports showed that new-home construction in the U.S. fell to a level of about 250,000 homes for all of 2011, which would be the fewest built since recording keeping began in 1963. Obviously, this is rough news for any business or person connected to the home construction industry.
What does it mean for home buyers? Aside from there being few new homes to look at, it also points to increased competition for existing homes coming on the market. As 1) more people become elligible to buy a home (meaning they have the financial means to truly afford one) and 2) as more elligible homebuyers gain confidence in economic recovery plus recognize now is an ideal time given prices and mortgage rates, there's assuredly going to come an increase in home purchasing demand. Multiple offers on properties are already becoming more common in my market area of San Jose and Santa Clara County in California. I expect it will step-up significantly as the spring and summer buying waves roll forward.
Take note, I'm not saying home prices are going to start climbing dramatically. I'm only suggesting that over this year, and perhaps into the next couple years, home purchase demand is going to out pace home supply. A growing number of people are all going to be fishing in the same pond for a limited number of fish. Only one hook gets each fish.
How big a pond do you want to fish in? Today there are relatively few people and plenty of fish. That will change. If you are at all thinking of buying a home, it would be in your best interest to consider acting sooner rather than later to avoid the "multiple offer blues; " that is, making offers and always losing out to someone else.
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