Kacy Lewis, a residential agent with Coldwell Banker Residential in Roswell, has a problem.
She’s finding it harder to find houses for her clients.
“Inventory is way down,” Lewis said. “It’s an unusual situation because it’s becoming a seller’s market, but buyers have a great opportunity with low interest rates.”
Recent statistics from First Multiple Listing Services, an online listing service utilized by the majority of brokerages in Atlanta, indicate a 31 percent drop (36 percent for townhomes) in inventory from January of last year to this year. Closing activity has soared; up 25 percent for single family detached homes and 30 percent for townhomes and condos.
The only sour note is on year-to-year price points.
The average price for detached housing has dropped 14 percent since last year. Townhomes have faired better and have only seen a 2 percent decrease.
However, Christopher Lane, senior attorney with Dickenson and Gilroy, counters that point, “We’ve seen price points coming up since the fall of 2011, and our volume has definitely increased.”
Additionally, he sees promise in future home building.
“We’ve seen a good number of residential lot sales taking place, as well,” Lane said.
Some people point to upcoming foreclosures as a cure for the inventory slump.
However, it seems that the big problem is that we aren’t building enough new homes nationwide to keep up with the population.
Steve Wesbury, an economist with First Trust Advisors, told Steve Forbes, in a recent interview, “We need one-and-a-half million houses per year just to keep up with population growth. We’re starting one-third of the houses we need just to keep up with population growth, and that can’t last.”
Unfortunately, the national housing market is down to about six to seven months worth of inventory.
Since nationwide housing completions are down 25.3 percent from December of 2008, we may be facing problems with providing enough housing.
However, there may be a silver lining in this dark cloud. The laws of supply and demand could step in and solve part of our economic problem. That is, as housing inventory disappears, home values rise. So much of our economy is tied to consumer spending and consumer outlook that this scenario could be the boost we need. With projected inflation from the Fed’s monetary policy and appreciation in values, our faith in our most valued asset, our homes, and thus, faith in our overall economy, might be restored.
Brian Patton, CCIM is a commercial real estate broker, author and instructor. He can be reached via his website: www.CommercialPropertyGuy.com or via cell phone 770-634-4848.