The scarcity of available existing homes for sale has been a matter of concern over the last three-and-a-half years. Ever since the housing crash of 2008, builders are highly wary of building before they have buyers in hand. Too many builders took it on the chin 13 years ago. Now, the housing market is reeling with a shortage of available homes for sale
A housing shortage only occurs when the number of homes significantly exceeds the number of people looking to purchase homes. That has been the case for the last 2 years. Millennials especially are beginning to enter into the housing market, creating a greater demand than anticipated. What the pandemic produced was an artificial suspension of transactions due to the limitation of agents to show homes for sale. In the early part of 2020, a knowledge of the transmission of the virus was a matter of grave concern, and both buyers and sellers were reticent about going into open houses and having their houses opened up to prospective buyers. That created a pause in the transactional flow of business.
The difference between the housing bubble of 2000 and the crash of 2008 is that the market was not being artificially pumped by an inflated stock market and governmental lending criteria that forced banks to make loans to buyers who did not have the financial capacity to service them.
Today we have low interest rates, a surging buyer population, and a shortage of available inventory.
During 2021, the number of real estate agents exceeded the number of available homes for sale. This was an anomaly never seen in the history of the real estate industry.
In the cases of urban centers such as New York, Philadelphia and San Francisco, owners were quick to migrate into less densely populated areas that were close enough to their jobs but far enough away from the crowds.
Currently in the state of New Jersey, there is approximately 2-months supply of homes available for sale. The traditional standard for inventory is placed at 6-months supply. In some cases, some counties in New Jersey have just over one month supply of homes available for sale. In addition to the shortage of available homes for sale, the days on market have fallen dramatically, in some cases to under 3 weeks. In several of the western New Jersey counties such as Burlington and Camden, the days on market have fallen from 15 months three years ago, to just under 1 and 1.2 months supply, respectively.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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