The US is 3.8 Million Homes Short!
Well, what does this mean, why and what can we do about it? It's no secret that the real estate market is the topic of conversation across the country with homes selling within hours and for sometimes $100,000 over list price, even for a dated, small townhouse in Bozeman, Montana! This isn't the case with every property, but it takes luck or an experienced agent to get your offer accepted as well as some give and more give on the buyer's side. This is what we call a "seller's market"!
The U.S. housing market needs nearly 4 million single-family homes to meet the nation’s demand, according to a new analysis from Freddie Mac. The 3.8 million shortfall marks a 52% increase in the housing shortage since 2018 according to an article in Realtor Magazine.
Brad Inman of Inman News put it brilliantly, "it's like a party where you invited a certain number of guests and ordered pizza to serve the invited guests. However, some uninvited guests crashed the party and started eating the pizza. Who are they, why did they crash the party and when are they going home?
When everyone started in their respective state quarantines, I said they would come to Montana in droves to escape their "jail situation." Why wouldn't people stuck inside of small highrise apartments and condos want to road-trip out to the American West to hike, fish, camp, and ski? That's where it started, then others living in heavily populated areas seemed to notice the close proximity of the neighbors all of a sudden and also wanted to escape to the wide-open spaces around the country. Thus began the great migration...and with the migration of vacationers, Air BnBs (if they were available) were quickly in high demand and booked solid. After experiencing the laid-back lifestyle in the west, renters turned into buyers. Once investors saw the trend, they too wanted in the game. Consumers who were buyers thought the real estate market would go down and put their search on hold and to their dismay, wished they had not waited.
It's anyone's crystal ball how long this will last and what will happen when it does change. There is a boatload of cash still on the sidelines waiting to invest with no endzone in sight. This real estate game is like when Ebay first hit the internet and everyone wanted to bid on something and see if they "won" their bid. Maybe it is a trend that will lose steam, maybe it's the new normal. Time will only tell.