Low Inventory in Housing - Who's to Blame?
Contributed by Ken Hagler
The housing market here in Alaska and around the US, has been facing a challenge these days: there just aren't enough homes for sale. How can this be? According to Mark Fleming, Chief Economist at First American, the root causes of today’s low supply comes down to two things: rate-locked existing homeowners and the fear of not finding something to buy. Let’s take a closer look at these issues and what they mean for potential home buyers and sellers.
Rate-Locked Homeowners
Homeowners who are rate-locked are those who have mortgages with rates lower than the current market rate. This means that it doesn't make financial sense for them to move, as refinancing would be too expensive. As a result, their homes remain off the market, unavailable for purchase by someone else.
The Fear of Not Finding Something To Buy
With so few homes available for purchase, many potential buyers (who might also be home sellers) are afraid that they won't find something suitable if they do decide to move. This fear leads them to hang on to their existing home, afraid that if they sell it they might not find something better or in the same price range.
What Does This Mean For You?
These two issues present a huge challenge for potential home buyers and sellers alike. With fewer homes available on the market, competition is tight. Even though some areas of the country show a drop in prices, Alaska prices have held relatively steady. That said, there are still ways you can make sure you get exactly what you're looking for when buying or selling your home - like working with a local real estate expert who knows how to navigate today's low inventory environment and can help you put your equity to work in order to keep the costs of your next home down. It also helps to get pre-approved so you know your buying power.
Low inventory is one of today's biggest challenges in the housing market - but it doesn't have to stay that way! By understanding why inventory is so low and taking steps such as working with an experienced Realtor, you can make sure you find the perfect house no matter what challenges may arise in today's low inventory climate. With their help and knowledge of local markets, you'll be well on your way towards locating your dream home soon!
Ken Hagler
Alaskan Realtor®
Better Homes and Gardens Real Estate Dream Makers, Wasilla, AK
1051 E Horvath Dr Suite 103, Wasilla, AK
(907)891-8830
www.alaskahomesforsale.realestate