According to a new survey by Trulia, featured in HousingWire, housing inventory has been in a free fall during the first quarter of 2017, with the steepest drops in the starter home and trade-up markets. The U.S. housing inventory hit its lowest level on record from January to March this year, with the total number of homes on the market falling 5.1 percent over the past year. In Tallahassee, Fla., low inventory of single-family homes is driving increased demand in key neighborhoods. As a result, house hunters are getting into bidding wars to land a new home before interest rates rise. Tallahassee Realtor Joe Manausa said increased demand and low stock is a national phenomenon.
“Not us. We had so many extra homes from the bubble. We didn’t really start to feel it until early last year. And now we’re in a market that the rest of the U.S. has been in for years.”
In Massachusetts, housing inventory was down by nearly 35 percent in February, and a 2.3-month supply of single-family houses was available for sale, according to data from the Massachusetts Association of Realtors. In nearby Rhode Island, the story is the same. Sales have got a fast start this year, but competition may be a key factor, according to Cheryl Young, a senior economist with Trulia.
“The tough buying market is characterized by competition driven by low inventory and challenges for first-time buyers as prices outpace income growth.”
According to the Trulia report, over the past year, starter homes fell from 26.9 percent of the market to just 25.9 percent of the segment. Inventory of trade-up homes also dropped, at 23.03 percent in 2017, down from 24.1 percent during the same period in 2016. Rhode Island Association of Realtors President Brenda Marchwicki told the Providence Journal that the current real estate climate is little more than basic economics.
“That is great news for homeowners whose equity is rising, but it’s not good for buyers who have limited choices and stiff competition when they do find a home that they like.”