This Is the Worst ‘Housing Drought’ Ever

The number of homes for sale is at the lowest level on record, according to the National Association of REALTORS®, who began tracking inventory 18 years ago. That means many home buyers likely will find fewer options this spring, and the homes that are being listed tend to sell fast and at a premium.

The lack of new-home supply is one culprit. Housing starts are only at about 75 percent of their historical average. Builders are focusing on pricier segments of move-up buyers, leaving a big void in the demand for lower cost homes that appeal to first-time home buyers. Builders blame the higher costs for land, labor, and materials as forcing them to concentrate on the higher end of the market.

Builders aren’t the only ones to blame, however. Investors purchased about 4 million distressed properties—mostly in the lower-priced starter home segment—during the housing crash. They have been holding onto these properties, continuing to rent them out rather than selling.

Source: “This Is What’s Behind the Severe Housing Drought,” CNBC (March 23, 2017)

California Silicon Valley Tech Boom Sparks Housing Boom

Housing isn’t hurting everywhere: A tech rush in Silicon Valley is once again causing mega-mansions to be in demand there. Real estate pro Alex Wang says he’ll get 17 or 18 offers on a property at times, and that buyers are even purchasing homes for hundreds of thousands of dollars over the asking price. Also, many of these buyers are paying cash and closings are happening quickly.

The social media tech boom in Silicon Valley has caused mansions to become sought-after, but with limited inventory of homes for sale, new construction and bidding wars are increasing, Fox News reports. 

In Palo Alto, Facebook’s headquarters, the median sale price of a single-family home rose nearly 5 percent over last year to $1.3-million in June, DataQuick reports.  

“The social media and explosion of high-tech IPOs are also creating a new work environment where people aren’t always in the office,” says Allison Buffam, marketing manager with SummerHill Homes. “They want to be able to be at home and work as well, and they want the best home they can afford.”

 Source: “California Bay Area Mansions Are in Demand Due to Tech Boom,” Fox News (Aug. 11, 2011)

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