Lack of inventory is number one problem in real estate.
The Lawhead Team recently came across an article from the Union Tribune. Did you know the biggest problem in real estate at the time is lack of inventory? Check it out.
No. 1 Real Estate Issue? Inventory.
Lack of housing inventory to feed consumer demand is a growing concern in San Diego County and statewide, a chief housing economist told local Realtors on Friday. Real estate pros fear this dynamic could keep the housing market from making progress because qualified buyers are edging each other out of slimmer pickings.
Leslie Appleton-Young, with the California Association of Realtors, said competition for homes began to heat up earlier this year in light of declining foreclosure resales and increased investor activity. The result, she said, has been increases in both sales and prices statewide, though we are still far from pre-recession peaks.
“The market is in the process … of healing,” she told local real estate pros at a housing summit held by the San Diego Association of Realtors. The event’s other keynote speakers — Gary London, with The London Group Realty Advisors, and Lawrence Yun, chief economist at the National Association of Realtors, echoed similar thoughts about inventory and the fact that California is in the middle of a tepid recovery.
Appleton-Young broke down housing inventory into three key categories, all very different from each other: equity, bank-owned and short sales.
“Equity” sales, or traditional sales, now make up almost 60 percent of total statewide home sales, up from 30 percent in January 2009, Appleton-Young’s numbers show. The share of bank-owned properties in the market have fallen from 60 percent three years ago to 20 percent now. And lastly, short sales, a process more lenders have now streamlined, are up.
This shift in the sales make-up indicates an increased demand in inventory, a higher presence of investors and a lack of distressed homes hitting the for-sale market. In other words, more potential buyers are competing for fewer homes, which can keep the market from moving forward, or at a stand-still, speakers said.
London and Yun, other speakers at Friday’s event, highlighted San Diego’s lack of housing construction due to an issue that’s specific to this county.
“You’re running out of land,” said Yun, who added that new-home construction has hit a 50-year low nationwide.
London said the age of traditional subdivision construction is over, pushing homebuilders toward going vertical and building in smaller batches.
The lack of inventory and the county’s population growth will help push up prices though the escalation will not be as rapid as in pre-recession days, London said.
Article at: http://www.utsandiego.com/news/2012/sep/07/sdar-summit/