Why the shortage of real esate inventory
Surely you've heard people discussing "it" at the coffee shop or standing in line at the supermarket. What is "it" you ask? "It" is the lack of available homes for sale. When it comes to shopping for a home in Seal Beach, people have grown frustrated with the lack of available inventory (currently 27 listings in 90740). So what is causing the shortage and why hasn't the trend reversed yet?
Everyone has their own version of the answer. According to a recent survey by the California Association of Realtors, those people that have considered selling in the last year (35% of all homeowners) have been reluctant to because of the affordability squeeze. That's a large number of potential home listings that are not coming to the market.
Year over year the month of August posted a 10.3% reduction in the inventory of available homes in the city of Seal Beach (29 home in 2014 versus 26 in 2015). The underlying issue with the affordability squeeze is that more than half of people who are considering the sale of their home said they desire a larger home. Instead of buying a larger home, many are building room additions and remodeling older homes.
Another interesting factor contributing the shortage is the change in the length of time that people own their home before moving. Typically people move every 7 years which requires the sale of their home and in turn brings inventory to the market. According to the CAR survey, 60% of people who haven't considered selling say their current home will be their retirement residence. That figure jumps to 70% for those that have been in their home for 15 years.
The result of all of this is buyers trying to locate homes for sale using unconventional methods. The hot topic seems to be "pocket listings" or homes not yet listed online with the MLS. The growing trend of holding back homes off of the MLS is frustrating many Realtors and buyers that may not have the resources to find them otherwise.
Add to all of this a new set of consumer protection measures arriving October 3rd courtesy of the CFPB. The industry standard 30 day escrow will be lengthened by an additional 9-14 days or more adding more pressure to the market. It's obvious that now more than ever, it's essential to work with an agent that lives and works in your market.
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