The Saga of Low Inventory, By Norma Flaskerud, RE/MAX Today
Apr 04, 2016 10:29AM
● Published by Elena Hutslar
The winter and early spring real estate market of 2016 is defined by one phrase: low Inventory.
The question is why? As of mid-March there are 14 single-family homes for sale in Pleasant Hill. Normal inventory would average at least 30 homes. Yes, they have been coming on the market but the demand far exceeds the supply; they sell quickly with multiple offers being the norm.
This is not unique to our local market. It was noted in an article by National Association of Realtors that housing inventory nationwide is lower than this time a year ago.
The spring buying season is right around the corner and current supply levels are not even close to what is needed to accommodate the demand. Double-digit appreciation is not healthy when household income and wages are barely rising.
Most common reasons local residents sell:
· Adult children sell their parents’ home (after death or move to assisted living).
· Families move to a bigger house or out of area to live near family, or be near better schools.
· Retirement: downsizing, staying local, or moving to be near their children.
· Job transfer (least common reason).
What are the main reasons for lack of inventory?
In our area, nothing new is being built and we rely on resale homes. So, why aren’t people interested in selling when home prices keep rising? Here are a few reasons why people might not be budging:
· More than two-thirds of baby boomer owners are choosing to make renovations to their home so they can age in place rather than move.
· There is a decrease in people moving to a new area for a job, so people are not selling for job transfers.
· Finally, many owners are stuck because of lack of inventory; they would be willing to sell but face a lack of decent options in terms of buying.
Speculation abounds over plans for the Molino family property on Pleasant Hill Road. On the Nextdoor website someone feared, “McMansions will be built there!” It is zoned R10, for 10,000 sf. residential lots. With 5+ acres available, after accounting for infrastructure, maybe 12 homes could be built there. We would say there is plenty of demand for 12 new sprawling ranchers in Pleasant Hill! In the past, homes over 2000 sf. were rarely built, and yet, people desire bigger homes. It would be wonderful to have them here so families do not have to move south to Danville for bigger homes. The need exists and no doubt those homes would be snapped up. Time will tell what the new owner plans for that property; we will keep an eye on it.Watch for future articles to learn if the shortage of homes