With more homes on the market compared to last year, it might look like buyers have plenty of choices. But here’s the catch: there are still more buyers out there than houses to go around. If you’ve been thinking about selling your home, you’re in a prime position to make the most of this high-demand market. Let’s dive into why this shortage of homes is happening and how it can work in your favor.
What’s Behind the Housing Shortage?
Understanding why housing inventory remains tight can shed light on why today’s market conditions are so favorable for sellers. Here are the primary factors contributing to the current shortage:
1. Underproduction of Homes
The U.S. housing industry has been playing catch-up for years, producing fewer homes than needed to meet growing demand. According to Zillow:
“In 2022, 1.4 million homes were built — at the time, the best year for home construction since the early stages of the Great Recession. However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.”
Simply put, the rate at which homes are being built hasn’t matched the growth in demand, leading to a long-standing supply gap.
2. Rising Construction Costs
Building materials, labor shortages, and lingering supply chain issues from the pandemic have made home construction more expensive and complex. In some areas, these costs have stalled new builds altogether. When the cost to build is high, fewer developers are willing or able to take on projects, which further limits available housing.
3. Regional Demand Imbalances
Certain areas, especially desirable locations like Brookings and similar markets, are seeing faster population growth than others. As more people relocate for work, lifestyle, or other factors, these areas see higher demand without enough housing supply to meet it. Since building permits often lag behind job growth and population changes, tight housing markets experience even higher demand and, consequently, higher prices.
How Big is the Gap?
According to Real Estate News, experts estimate that the U.S. is short by about 3.3 million homes, based on analysis from multiple data sources. And that’s just to meet current buyer demand. Over the next decade, it’s projected that the U.S. will need around 18 million new homes to accommodate future household growth, second-home demand, and replacements for aging homes, according to John Burns Research and Consulting (JBREC).
With numbers like these, it’s clear: even though we’ve seen an increase in available listings since last year, the overall housing shortage is still a challenge. For you, as a potential seller, this means your property is entering a competitive landscape where buyer demand is still high.
Why Selling Now Works in Your Favor
If you’re ready to sell, here’s why this tight inventory works for you:
- Increased Buyer Attention: With fewer homes to choose from, buyers are competing harder for the properties available. Your home is likely to get more visibility and attention, which can translate to more serious offers.
- Upward Pressure on Prices: When demand is high and supply is low, prices tend to rise. Even with higher inventory than last year, the shortage keeps the market in your favor, potentially driving up your home’s value.
Get Expert Guidance for Brookings, South Dakota’s Market
Real estate markets vary significantly by region, so working with a knowledgeable local agent is crucial to making the most of today’s market. An experienced Brookings agent, like Shane Andersen with the Brookings Home Team, understands the latest trends and can help price your house to attract the right buyers. Shane’s expertise will also come in handy when developing a strategy that highlights your property’s best features, ensuring your home stands out in this competitive market.
What You Need to Remember
This housing shortage isn’t something that will resolve overnight. It will likely take years for the market to fully meet demand, and until then, buyers will continue to face limited choices. For sellers, this creates a unique opportunity. When your home enters a market with limited inventory, you’re positioned to attract buyers who are ready to move and willing to compete.
Your local agent will be instrumental in navigating this market, helping you maximize your home’s value and ensuring a smooth process from listing to closing. So, if you’ve got “selling” on your mind, you’re in a strong position to make a move.
Bottom Line
Even with more homes on the market than last year, the national and local inventory of homes for sale remains tight. For sellers, that’s good news. You’re likely to benefit from increased interest and potentially higher offers in today’s competitive market. Connect with Shane Andersen of the Brookings Home Team to make the most of this market and find out what strategies can help you achieve a successful sale.
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