Why aren't many homes for sale?

Different markets allow for different circumstances. We just came out of a market that allowed many to upgrade their homes, get into another home with a very low interest rate and allowed many buyers to qualify for a loan. With interest rates climbing to current levels allows for less buyers to be able to afford, less incentive for people to upgrade their homes and less incentive to move even if they want to downsize because in many cases their payments will be the same or more then staying put.

To provide some context, we must reflect on the significant challenges faced during the housing recession that began in 2007. It took several years for the market to rebound, finally showing signs of recovery around 2013. Throughout this period, interest rates remained relatively stable at around 3%. Unfortunately, the consequences of the downturn were severe, resulting in halted homebuilding activities and numerous builders declaring bankruptcy. Fast forward to the present day, and we find ourselves grappling with a new set of circumstances. Interest rates have soared to 7%, accompanied by a considerable surge in home values over the past few years. This sudden shift has inadvertently created a lack of incentive for homeowners to consider moving

In Florida, the market is very competitive, and basically boils down to supply and demand. We do not have enough inventory to meet the demand of buyers moving here. The low interest rates, coupled with Covid created a perfect storm of buyers looking to relocate to places they can work from home and enjoy the beach life as well. Even though that has slowed some we are still playing catch up trying to supply enough homes to meet the demand.

In Arizona we had several years of above average transactions. But now with new interest rates around 7%, most homeowners do not want to give up their 3/4% interest rate mortgages. Moving up to a little bigger home can mean a monthly mortgage payment that triples. So more homeowners are choosing to stay, not sell for now. It may take several years before we see a more active market with a good supply of homes for sale again.

Hi Sarah, we have a balanced market in SW Florida, Lee county. Currently we have about 5 to 6 months of inventory.

Sarah, This market is wonky in some areas there is nothing available and in others, there are 12 months of inventory. Where are you currently looking? Feel free to call me at 512-750-5777. Kelly Thate

Hi Sarah, great question. Primary reason here is the sudden jump in mortgage interest rates over the past year. Many home owners currently have interest rates at 3% or less, as they either bought or refinanced over the past few years. Now, if they were to buy a new home, their monthly costs would go up significantly due to the higher interest rates and overall higher price in the market. As a result, homeowners need a REALLY good reason to put their homes on the market and move. This, along with an overall lack of new construction, has created a log jam in the market and very limited inventory.