We are seeing the same low-inventory trends in most of the hip-and-happening markets around the country, like Seattle. Sam is a prolific blogger and an active realtor – here’s his take (h/t Susie!):
An excerpt:
The headlines read “Seattle’s real estate market is hot!” Under that glossy surface, Seattle real estate’s inventory dearth is a growing, unruly mess.
Home prices in King County rose 12% in February, but that’s no longer an attention-grabber. They rose 18% in the same period one year before.
Inventory is at just 1.1 months. The number of available homes for sale dropped 21% in one year. These crisis-level numbers should be astonishing, but they’ve begun to seem unremarkable. After all, inventory dropped 26% in 2015, 17% in 2014 and 10% in 2013.
The shock has worn off. We’ve been inundated with double-digit noise for so long in the Seattle real estate market that we’ve almost become numb to it. While that’s understandable, it’s also problematic.
King County is issuing 200 new driver’s licenses every day to people moving in from out-of-state. That doesn’t include in-state migration and in-county natural population growth. Meanwhile, the county is only issuing building permits for 27 new housing units per day.
The diverging trend lines of people and homes get further apart by the day, month and year. Prices rise swiftly.
Residents get squeezed. They “drive to qualify”. They live further out, commute longer distances, create more traffic gridlock, spend more on transportation, have less time to spend with their families and experience a diminished quality of life.
There’s no risky financing housing bubble to blame like there was a decade ago. Employment and in-migration in King County is forecast to rise exponentially in the coming years. These are people with real jobs, verified income and real down payments. There just aren’t enough homes, so prices continue to soar.
Read full article here:
Is it just me or do these news of widespread housing shortages just not make any sense?
Why isn’t the “free market” addressing these housing shortages, when the demand is apparently there?
Why aren’t builders going all in and building supply to satiate the demand?
Why aren’t people cashing in their lottery tickets and selling their homes at these higher prices?
Almost didn’t see your hat tip, JtR. I love your hat tips. So retro! Reminds me of my childhood. My dad wore a hat every day to work…
https://goo.gl/images/AacIjY <–Stetson Hats
“Why isn’t the “free market” addressing these housing shortages, when the demand is apparently there?
Why aren’t builders going all in and building supply to satiate the demand?
Why aren’t people cashing in their lottery tickets and selling their homes at these higher prices?”
1. Sir, the city did a soil test of your property, since there was a gas station down the block with a leaking gas storage unit. Seems noxious chemicals seeped under your property. Gotta be excavated and soil cleaned before you can build here. The gas station owner filed for bankruptcy 3 years ago. Cleanup cost will be a couple hundred thousand, or you can file against the city to hash it out. Good luck. We’re all counting on you.
2. Sorry, no McMansions in our incorporated community for you! Repeat after us: “one story bungalow.”
3. Sir, if you want to build that exclusive high end condo building, you must also build “affordable housing” as a part of your building. Ideally, we’d like the doctor who buys his luxury condo to live right next door to the guy who cleans the hospital floors, because that’s awesome, wouldn’t you agree?
4. Sir, we’re sorry, but there’s no room for affordable housing in Malibu, because we live here, and we like it without affordable housing, and our servants can take a bus from Boyle Heights, and be here within 2 hours. We’ve asked them if that’s okay, and they say it’s mooey bueno, so you see, there’s really no problem.
5. Sir, unless. you’ve made a significant financial commitment to my city council campaign fund, I’m afraid you’ll just have to follow the rules like everybody else. That is, there are building permits, and then there’s BUILDING permits. You want the second kind. If you’re wise. If not, good luck.
6. Sir, that may seem like a poorly constructed eyesore to you, but to the community, it’s “Freddie’s Smoke House Barbeque”! Established in 1966, everybody knew and loved Freddie, and since he died, we’ve made his shack an historical landmark. You’ll have to find a way to build your condos over and around that abandoned shack, or build elsewhere. If you try it, we will Facebook post your every move to your detractors. Most are massage therapists, or professional cat sitters, so their protest time is very flexible. Good day to you, sir. I SAID GOOD DAY!
7. Before mom and dad passed, they bought this little Dana Point beach house in 1961 for 20K. Its never been renovated, yet is now worth over 3 Million, and climbing. Thanks to Prop 13, we only pay 8 thousand a year on property taxes. We live in Arizona, but we won’t be selling that house for the next thousand years, sorry. God bless Howard Jarvis, and God bless Airbnb. Amen.
8. Sir, if you’re gonna build that big sucker in the middle of downtown, our Union would like to have a word or three with you, and watch it with the attitude.
For the next thousand reasons, watch for my self-published ebook catering to new home builders in Southern California beach cities: “Consider New Zealand.”
HAHAHAHA!!!
Thanks, Daytrip! Those were awesome!
#5 was my favorite!
And there’s a whole lot of truth in every single one of them! 🙂
Oh, Daytrip, I laughed all the way through your comments! #3 caught my eye and my funny bone (so to speak). Be well!
All good reasons for there being a shortage. Let’s add another one…rates are moving up….who is willing to move when they are locked into a 30yr fixed at 3.375%
limited new builds + locked in with low rates + Household formation growing + increased employment and possibly better wages = Prices are going up