More Homes for Sale: A Buyer’s Advantage

Is now a good time to buy a home?  maybe.  There are more homes for sale now than in recent years.  That gives you more choices.  BUT the question is more about you than the available housing inventory.

What are YOUR needs?  and a big question – are we headed for a recession?  maybe.  Does that matter to you and your plans?  maybe – maybe that’s just the opportunity you can use!   Check out this article that goes over what’s happened to housing in past recessions.

Speculation can create fear and the news we see tends to be sensational without depth or context or important factors relevant to the market you’re in.   Be informed and your next steps become more clear and confident!

Below is a quick bit of reasoning and the state of our current housing market.  Remember!  Real estate is impacted by hyper local circumstances.  Get in touch with your realtor for an in depth look at the area you’re considering.  If you’re looking in the Houston area market, that’s my market.  Call me today.

Maybe you’ve heard the number of homes for sale has reached a recent high. And it might make you question if this is the start of another housing market crash.

But the reality is, the data proves that’s just not the case. In most areas, more inventory isn’t bad news. It’s actually a sign of the market returning to a more stable, healthy place.

What’s Going on With Inventory?

Based on the latest data from Realtor.com, inventory just hit its highest point since 2020, shown with the white line in the graph below.

But what you need to realize is, at the same time, inventory levels still haven’t returned to pre-pandemic norms (shown in gray):

That means there are more homes for sale now than there have been in quite some time.

And while it’s true inventory is up significantly compared to where it was over the last few years, the number of homes on the market is still well below typical levels. And that’s important context.

Why This Isn’t the Problem A Lot of People Think It Is

Some people hear inventory’s rising and immediately think about 2008. Because back then, inventory spiked just before the market crashed. But today’s situation is very different.

Here’s the key reason why. We don’t have a surplus of homes; we have a deficit to climb out of. What we’re dealing with is a long-term housing shortage – and it’s a big one.

The red bars in the graph below show all the years where housing starts (new builds) didn’t keep up with household formation, going all the way back to 2012. The deeper the bars in the graph, the more the housing deficit grew (see graph below):

And one of the reasons this housing shortage kept growing is because new home construction just didn’t keep up with the number of people who need to buy homes. In fact, the U.S. is actually short millions of homes at this point, and it will take years to overcome that gap. Realtor.com says:

“At a 2024 rate of construction relative to household formations and pent-up demand, it would take 7.5 years to close the housing gap.”

That means, in most areas, there isn’t a risk of having too many houses on the market right now. It’s quite the opposite – a vast majority of markets actually need more homes.

Which is why, even though inventory is rising, it’s not a problem on a national scale. It’s just helping to fill a gap that’s been growing for years.

Bottom Line

Don’t let the headlines scare you. Rising inventory isn’t a sign of a crash. It’s a step toward a more normal, stable housing market.