October 2021 Market Update

By D. Michael Burke

Welcome to the 4th quarter of the year! In previous months we’ve talked about home sales prices, inventory levels, and consumer demand, but this month we wanted to highlight something different- notably, that the US is in the midst of a significant housing shortage. 

Let us explain. 

A recent article by CNBC found that the nation is short by roughly 5.24 million homes, and that builders haven’t been able to (nor are they able to) make up the difference. The latest figure reflects a rise from 2019 data, which found that the US was short roughly 3.84 million homes.  

Also, notable, is that recent census data found that more than 12 million new households were formed between January 2012 and June 2021—and that while roughly 7 million new homes were built during that same reporting period, the supply vs. demand model is still largely upside down.  

The reason for the shortage, news outlets report, is due to several factors, such as labor shortages, supply chain disruptions, and pandemic-related price increases that span everything from increased lumber and land costs. And unless homebuilders are able to double their current production rates (which, albeit unlikely, would bring supply and demand models level within the next 5-6 years), the shortage is expected to persist. 

All of this is good news for sellers.  

Why? Because local inventory levels have reached their lowest point in more than a year. For example, whereas in January 2020, inventory levels in Lee and Collier Counties were recorded at slightly above 7 months, and at approximately 5 months, respectively, current inventory levels in both counties are at or below 1 month. The list price versus sales price ratio is also still climbing, and today, home sellers in both counties are concluding sales at 99-100% of list price. 

Suffice to say, if you’ve been thinking about selling, now is a great time to talk to a real estate agent.   

 
Our experienced team of professionals is here to help you achieve your residential real estate goals. Whether buying or selling, our tools are PROVEN to help you get the most from your transaction!  

Let’s chat! Just give us a call at 239-498-7600. We look forward to hearing from you