Since the economy started its slow climb out of the Great Recession, one of the biggest lead weights that the housing sector has been carrying is lack of inventory. Many homeowners were under water on their house value and decided to stay put in their current home longer than normal. Those potential “move-up” home buyers were not freeing up inventory for first timers.
At the same time builders were having unprecedented difficulty securing the kind of financing necessary to add to housing inventory with large-scale new home developments.
Those two circumstances left first-time home buyers unable to move out of rental housing and gave landlords great freedom to raise rents without worrying about overpricing their markets. In most East Coast urban markets monthly rental rates are close to – if not equal to – an average mortgage.
We may be seeing the light at the end of the tunnel. Builder magazine reported last month that in January construction-related jobs rose by 44,000 in the US, increasing in both residential and non-residential categories. The construction industries added 12,000 jobs per month, on average, in 2019.
Slowly rising employment and wages are also adding pressure to the need for new commercial and residential building projects. COVID-19 / Coronavirus may cause a slight business downturn for a few months, but demographic pressures from the Boom Echo generation will only add to the demand for new homes to be built and housing inventory to increase.
Spring 2020 is looking like it could be one of the best spring markets in several years, so if you have thought about selling or buying, let me know. We can do an analysis of your home and your specific neighborhood and get a better idea of just what these market factors mean to you.