And Speeding Up Time-To-Closing
Nationally, U.S. home inventory has fallen 8.9% in the second quarter of 2017 from the same period in 2016. Domestically, inventory is 20% less than it was five years ago. Again, these figures are not an anomaly, as this trend has continued unabated for nine consecutive quarters.
New Jersey single family real estate inventory has fallen significantly more, from 48,730 to 39,009, a 19.9% drop in the last 12 months. In the area of condos and townhouses, that drop was calculated to be nearly 23%, and for adult housing, a drop of 23.7%.
The inventory shortage is in part due to the stripping away of available properties without the addition of replacement housing.
In addition, the tight inventory has not been able to expect sufficient supply coming from the construction industry, which is still reticent about risks associated with the same kind of ebullient confidence that caused their own industry to crater last time.
Concurrently, there is a very significant skilled labor shortage within their industry.
According to a number of research sources, homes are spending less time on the market than at any other period in the last 10 years.
In New Jersey, back in 2011, the average single family home would spend 109 days on the market before closing. Today, that number has fallen to just 62, as of July 2017.
Trulia reported that “57% of homes in 2012 were still on the market after two months while today that number stands at 47%.”
The Trulia Inventory and Price Watch [TIPW], found that, on average, metros with the largest decreases in inventory over the past five years have also seen significantly fewer homes on the market after two months.
The TIPW also reported the following facts affecting the housing stock nationally and in the 100 largest U.S. metros from Q2 2012 to Q2 2017:
- Nationally, the number of starter and trade-up homes on the market has decreased substantially, falling 15.6% and 13.1% respectively, during the past year, while inventory of premium homes has fallen 3.9%.
- The disproportional drop in starter and trade-up home inventory is making affordability a greater stretch for first-time homebuyers.
- Starter and trade-up homebuyers need to spend 3.1% and 1.7% more of their income than in 2016.
- Premium homebuyers only need to shell out 0.9% more of their income than in 2016.
- Falling inventory is strongly correlated with how long homes stay on the market. On average, the more a market’s housing inventory has fallen over the past five years the fewer share of homes are still on the market after two months.