Are You Ready for Spring Success?

12 months ago who would have thought, as COVID shook the global economy to its knees, that we’d be worrying about housing Inventory less than a year later? But as you look back on it you see that maybe we should have had an inkling. Historically low rates layered with the need for more space to home school and/or work from home, sprinkled with seller concerns with listing and showing their property, peppered with many renters finally realizing that home ownership blows renting away, and you’re left with a pretty tasty recipe for vanishing inventory. Now top all of this off with first time homebuyer demand being unusually strong and we wind up with the one of the lowest number of housing units for sale on record.

There is some relief on the way though. Warmer weather and the end of school (virtual or not) brings sellers out of hiding. In addition, as we gradually approach herd immunity levels and people have less fear of the steps involved with selling their homes, pent up supply could be released. Also, builders have been racing to construct homes and the home building industry, which reached its peak size in 2006, is starting to see more capacity come on line. Finally, all States are not equal. Places with higher taxes and more regulation, like NJ, PA, NY, CA, and MA will probably see more of a net increase in inventory as COVID has allowed for much greater mobility. The opposite is true for lower tax, less regulated States like TX and FL. So while I’m not suggesting we’re going to see a glut of homes for sale any time soon, I am saying that we’re likely to move off the bottom of the inventory charts very soon and back into the more “normal” level of inventory we saw in 2019 and early 2020.

So educate your borrowers on the need to bid quickly and strong when they see the house they want. For those considering paying more than asking, use our MBS tool kit to estimate how many months, given today’s rate of home price appreciation, it will take until they are breakeven. I think you’ll be surprised at how little time it takes and it might well make the buyer decision process smoother and less stressful on them. Hope this helps and as always thank you ALL for everything!