Housing Inventory Shortage. Why and What To Do.

By
Real Estate Agent with Keller Williams Reston 0225224571

If you’ve been house hunting in 2017 then you are well aware of the housing inventory shortage Northern Virginia is facing.  The low supply has continued to push prices up and create scenarios of multiple offers throughout NOVA. 

 

So why is inventory so low?   

 

1     Low Inventory – Wait, what?  Sellers know there is currently a low supply of listed homes and are hesitant to join the pool of buyers searching for a new home.

2    Mortgage Rates – Many current homeowners have the luxury of historically low interest rates.  So the question becomes why give up a rate of 3.5% for an increase to 4.5%.  

3    New Construction – While starts are at the highest level since 2006, they still aren’t at expected levels.  Rising land costs, an increase in regulation and zoning costs, a shortage of skilled laborers, and growing material costs have kept builders focusing on multi-family and high-end construction.

4    Underwater – 1 in 5 homeowners still don’t have enough equity to sell their home.  

5    Remodeling Trends – Many homeowners are taking a different approach and opting to renovate their current house rather than sell and purchase a new one.

     

So how do buyers compete in areas with tight inventory? 

 

      Financing – Have your prequalification in place and ready before you start looking.

     Availability - Be available at a moments notice to view homes that come online.

     Confidence - Ensure you are positive about the type of home you want and the location.

     Flexibility – When placing offers on a home, be flexible with your contingencies.

     Rent Back – Consider offering the sellers a rent back option so they can feel comfortable        searching in the same market.

    Inspectors – Bring a home inspector in before you make an offer.  Knowing the house has a clean bill of health can alleviate a Home Inspection Contingency and make your offer more attractive.

    Agent – Hire an agent who is well connected and thinks outside the box.  An agent with keen negotiating skills, willing to door knock, call expired listings, or has a large database full of potential sellers is the right agent to guide you through this environment. 

 

     Have you purchased a home in this low inventory climate?  If so, share your stories and tips.

Comments (4)

Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Nikki., great post, and in Denver we have been experiencing this for the last four years.   Homeowners are fearful of listing their home, and not having a replacement home in place.   

Dec 03, 2017 08:58 AM
Nikki Lagouros, Realtor

Joan,


I work mainly as a buyers agent and its so frustrating for clients as well as myself.  Funny thing my mom had a condo in Denver for years she could not get rid of, then all of a sudden your market hit a boom.  We are seeing a trend in prices starting to tick downward this month, but the inventory is still low.

Dec 03, 2017 09:04 AM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Many reasons for the shortage, but one is we didn't build enough houses when the recession was full tilt

Dec 03, 2017 05:56 PM
Golden1 Agents
San Mateo, CA

Thanks for sharing.

Dec 07, 2017 03:05 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Welcome to Active Rain.  I know you will enjoy your time here.

Dec 10, 2017 05:41 AM