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Patience Is the Key to Buying a Home This Year

April 28, 2021 By Tami Savage

Patience Is the Key to Buying a Home This Year

The question many homebuyers are facing this year is, “Why is it so hard to find a house?” We’re in the ultimate sellers’ market, which means real estate is ultra-competitive for buyers right now. The National Association of Realtors (NAR) notes homes are getting an average of 4.8 offers per sale, and that number keeps rising. Why? It’s because there are so few houses for sale.

Low inventory in the housing market isn’t new, but it’s becoming more challenging to navigate. Danielle Hale, Chief Economist at realtor.com, explains:

“The housing market is still relatively under supplied, and buyers can’t buy what’s not for sale. Relative to what we saw in 2017 to 2019, March 2021 was still roughly 117,000 new listings lower, adding to the pre-existing early-year gap of more than 200,000 fresh listings that would typically have come to market in January or February. Despite this week’s gain from a year ago, we’re 19 percent below the new seller activity that we saw in the same week in 2019.”

While many homeowners paused their plans to sell during the height of the pandemic, this isn’t the main cause of today’s huge gap between supply and demand. Sam Khater, Vice President and Chief Economist at Freddie Mac, Economic Housing and Research Division, shares:

“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in the decrease in supply of entry-level single-family homes or, ’starter homes.’”

When you consider the number of homes built in the U.S. by decade, the serious lack of new construction is clear (See graph below):

Homes Built in the U.S. by Decade (in millions) 1930-1939 is 5.4 million, 1940-1949 is 9.6 million, 1950-1959 is 21.4 million, 1960-1969 is 20.2 million, 1970-1979 is 25.8 million, 1980-1989 is 25.2 million, 1990-1999 is 26.7 million, 2000-2009 is 27.1 million, and 2010-2019 is ONLY 5.8 million (just a tad higher than in the 30s, when the population was way less).  Source: Robert Frick, NFCU

The number of newly built homes is disproportionately lower than the rate of household formation, which, according to the U.S. Census Bureau, has continued to increase. Khater also explains:

“Even before the COVID-19 pandemic and current recession, the housing market was facing a substantial supply shortage and that deficit has grown. In 2018, we estimated that there was a housing supply shortage of approximately 2.5 million units, meaning that the U.S. economy was about 2.5 million units below what was needed to match long-term demand. Using the same methodology, we estimate that the housing shortage increased to 3.8 million units by the end of 2020. A continued increase in a housing shortage is extremely unusual; typically in a recession, housing demand declines and supply rises, causing inventory to rise above the long-term trend.”

To catch up to current demand, Freddie Mac estimates we need to build almost four million homes. The good news is builders are working hard to get us there. The U.S. Census Bureau also states:

“Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,766,000. This is 2.7 percent (±1.7 percent) above the revised February rate of 1,720,000 . . . Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,739,000. This is 19.4 percent (±13.7 percent) above the revised February estimate of 1,457,000. . . .”

What does this mean? Lawrence Yun, Chief Economist at NAR, clarifies:

“The March figure of 1.74 million housing starts is the highest in 14 years. Both single-family units and multifamily units ramped up. After 13 straight years of underproduction – the chief cause for today’s inventory shortage – this construction boom needs to last for at least three years to make up for the part shortfall. As trade-up buyers purchase newly constructed homes, their prior homes will show up in MLSs, and hence, more choices for consumers. Housing starts to housing completion could be 4 to 8 months, so be patient with the improvement to inventory. In the meantime, construction workers deserve cheers.”

Bottom Line

If you’re planning to buy this year, the key to success will be patience, given today’s low inventory environment. Let’s connect today to talk more about what’s happening in our area.

Tagged With: Buying Myths, First Time Home Buyers, For Buyers, Housing Market Updates, Move-Up Buyers, New Construction

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I help homeowners sell their existing home and shift into a home more suitable to their needs in the North Metro Atlanta area (specifically around Cumming, Canton, & Milton). Read More…

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The market has been on a roller coaster lately.  Super excited about the mortgage rate drop on August 4, 2022.  So we'll take a moment to look at 
• the mortgage rates week-to-week, 
• review the latest data from NAR on pending and existing home sales, and
• see/hear what some of the experts have stated.

Digital Business Card: https://tamisavage.com/bc  (so you can reach out, find me on social media platforms, and more)
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Source for Data in Video: https://apnews.com/article/key-inflation-report-highest-level-in-four-decades-c0248c5b5705cd1523d3dab3771983b4
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🤝 I'm here to help with your real estate goals, so reach out if there's anything I can do.

For more information:
📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
📧  tami@tamisavage.com
🌐 www.tamisavage.com


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I'm Tami Savage, a local Realtor® with eXp Realty in Cumming, GA. We lived on the southside of Metro Atlanta in Fayette County, GA (Peachtree City & Fayetteville) for 19 years then moved away for about 5 years.  Georgia recently called us home, we bought a house in west Forsyth this past Winter.  Excited to get to know the area, community, businesses around, and more.  

My goal is to present helpful information with an emphasis on the Real Estate market (of course) but also highlighting Cumming, Canton, Ball Ground, Milton/Alpharetta, and surrounding areas.  

Hit the subscribe button to get real estate info every week. 

Want more info ... 
check out my digital business card:   https://tamisavage.com/bc

📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
National Housing Market Update for end of July 2022
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_vl9R6_iverE
Want to know what the future holds for rates, prices, and inventory? Let's connect so you have a trusted advisor to answer your housing market questions.

Sources for Data in Video
• https://www.marketwatch.com/picks/until-inflation-peaks-mortgage-rates-wont-either-we-asked-3-economists-and-real-estate-pros-will-mortgage-rates-climb-higher-this-summer-01655941487
• https://twitter.com/RDC_Economics/status/1542511111852793857
• https://www.bankrate.com/real-estate/housing-market-predictions/
Expert Insights on Where the Housing Market Is Heading
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Today's market is at a turning point. Let's connect so you have an expert in your corner when you sell your house.
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Getting pre-approved is a great opening play as a homebuyer. Let's connect so you have a strategy in place that helps you feel confident in your home search.
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Is it a good idea to buy a house now? 💰🏡

Check out the video to see what the experts say and see the mortgage changes throughout 2022 so far. 📈

🤝 I'm here to help with your real estate goals, so reach out if there's anything I can do.

For more information:
📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
📧  tami@tamisavage.com
🌐 www.tamisavage.com


-------------------------------------------------------------------


I'm Tami Savage, a local Realtor® with eXp Realty in Cumming, GA. We lived on the southside of Metro Atlanta in Fayette County, GA (Peachtree City & Fayetteville) for 19 years then moved away for about 5 years.  Georgia recently called us home, we bought a house in west Forsyth this past Winter.  Excited to get to know the area, community, businesses around, and more.  

My goal is to present helpful information with an emphasis on the Real Estate market (of course) but also highlighting Cumming, Canton, Ball Ground, Milton/Alpharetta, and surrounding areas.  

Hit the subscribe button to get real estate info every week. 

Want more info ... 
check out my digital business card:   https://tamisavage.com/bc

📱   Cell:  (770) 744-2524
☎️ Office:  (888) 959-9461 x2543
National Housing Market Update for mid-July 2022
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_Dqc2-H0E9mU
For the next five years, experts say home prices will continue to rise. Let's connect if you're ready to invest in homeownership and grow your wealth.

Sources used for data:
https://pulsenomics.com/surveys/#home-price-expectations
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Americans rank homeownership as the top sign of financial success. Let's connect if you're dreaming of buying a home this year.

Read the article: https://tamisavage.com/more-americans-choose-real-estate-as-the-best-investment-than-ever-before/

Sources used for data:
https://www.bankrate.com/mortgages/homeownership-remains-centerpiece-of-american-dream/
Homeownership Is Still the American Dream
YouTube Video UCje-ynLSmvEYv1nXUpNTiMw_DhSRSEbnze8
Load More... Subscribe

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