The housing supply is insanely low right now. It is getting ridiculous. Why is it so low? Let’s review......
SOME REASONS WHY THE HOUSING SUPPLY IS LOW
1) Not listing during the pandemic: Sellers aren’t listing as often during the pandemic. This has been common in many markets across the country, and in many parts of the country monthly inventory is down about 50% when compared to last year.
2) More demand: Mortgage rates below 3% have caused buyers to jump off the fence and basically gut the market. Thus, increased demand and a growing Millennial population of first time home buyers has depleted our listing inventory (which was already low).
3) Lack of new construction: We have had population growth in the midst of anemic new construction since the housing bubble burst. In other words, we have not built enough units and we’re really beginning to feel the sting of it.
4) Shift in demographics: People are staying in their homes longer and therefore not selling as often. Last year Redfin published research stating owners are staying in their homes an average of thirteen years instead of eight years, which means there aren’t as many homes being listed for sale.
5) Increased migration: Some markets are seeing more buyers from outside the area flocking to the neighborhood. Lots of Oregonians and Californians of course are leaving their state and heading to Idaho, Nevada, Texas. All the usual suspects, but who is moving to the Washington market? According to the IRS tracking site "How Money Walks", a majority of new Washington State sales are a result of our Portland Oregon neighbors who are crossing the river for some tax relief.
6) Nowhere to go: Some owners would list but they feel there is nowhere to go because homes are too expensive, or inventory is too thin.
7) Shift in home size: We have been building larger homes for decades now, which could eliminate the need for some folks to buy something else because they are satisfied and able to stay put. During the pandemic of course we’ve seen buyers target larger homes.
8) Other: Blackstone and investment funds purchase thousands of homes that have not resold on the open market. While maybe not a firm reason, it is worth mentioning. We’ve also seen wildfires in areas outside of the County where homes have not been rebuilt or Sellers have decided to rebuild someplace else.
9) Not a distressed market: We used to have more listings because of all the distressed sales, but we just don’t have that sort of market any longer. Bank-owned sales (REO) represent less than 1% of all sales in Clark County as well as the region, and short sales are even rarer.