For the first time in a long time, the outlook for residential real estate is decidedly bullish. Stock markets and consumer confidence are riding high (at press time), job growth is continuing to rise, and interest rates—though on the upswing—can still be categorized as low. Despite insuperable student debt and the continued lure of renting, consumers across all demographic groups are most definitely in favor of homeownership. Yet, there’s a rub—and a big one: lack of inventory. In fact, a whopping 62 percent of respondents to RISMedia’s 2017 Power Broker Survey* reported that a lack of inventory was their biggest challenge in today’s market. And with low inventory comes pent-up demand and rising prices, putting many on alert for another potential bubble. So what’s a Power Broker to do? Make sure their agents are well prepared for the challenge.
The Race for Marketshare
While a concern in many markets last year, this year, the inventory crunch is being felt across the U.S., not just in major metro areas or hot spots like Southern California and the Pacific Northwest.
Lennox Scott, chairman and CEO of John L. Scott Real Estate in the Pacific Northwest, has been suffering through an inventory shortage for some time, and its effects are creating stagnation for current homeowners as the shortage causes prices to rise. “We are experiencing a frenzied market for homebuyers trying to get a home,” he explains. “We are virtually sold out of inventory, so each new listing is receiving multiple offers. With such a severe shortage of inventory, it is now creating seller gridlock in the more affordable and mid-price ranges. Sellers are afraid to put their home on the market, because it will sell instantly, and they are faced with trying to win in a multiple offer situation to get their next home.”
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