Diana Olick on CNBC said, “Presidents Day weekend is traditionally seen by real estate agents and homebuilders as the start of the spring housing market — the busiest time of year for home sales. The number of listings always rises, and it will this year as well, but inventory is already low to begin with that even the new listings will not be nearly enough.
“I think inventory is going to remain tight. The closer you are to urban centers, the tighter the inventory, because the demand is strong, and a lot of that stuff gets scooped up before it hits the market,” said Jane Fairweather, a real estate agent in Bethesda, Maryland.
The latest numbers paint an empty picture. Inventory at the end of December nationally was down nearly 4 percent from the previous December, but sales were up nearly 8 percent, according to the National Association of Realtors. The supply of homes for sale was the lowest since the start of 2005, and back then there were far more homes being built to add to overall supply. As for January, the NAR’s listing site, Realtor.com, reported that listings were down a sharper 4.4 percent from a year ago.
With that in mind, let’s look at why there is so little inventory.
According to a study released by Zillow, in some big cities like Las Vegas, Chicago and Atlanta up to 20% of homeowners still have negative equity, also described as being “underwater.”
That means that – at best – those owners would break even if they sold their homes. More likely, it would cost them money to sell the home. Nearly 37 percent of homeowners are effectively underwater, that is, “they don’t have enough equity to comfortably cover the costs of selling their home and buying a new one,” according to Zillow, a Seattle-based real estate data firm.
It’s a tough housing market for some. Almost a third of homeowners need higher prices to have enough equity to sell and buy another house, yet the higher prices go, the less affordable housing is for potential home buyers who can barely qualify for a loan now, because median incomes adjusted for inflation have been flat for more than a decade.
There are many reasons to sell like downsizing, divorce, job transfer, financial difficulties, yet the homeowners are stuck and contributing to low inventory.
There is a solution for some.
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Give us a call today at 402.909.0686 to let us know what YOU need help with!