What Record-Low Housing Inventory Means for You

<article class="post-1877 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-1877"><span class="entry-date">January 28, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">What Record-Low Housing Inventory Means for You</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=What+Record-Low+Housing+Inventory+Means+for+You&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fwhat-record-low-housing-inventory-means-for-you%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="What Record-Low Housing Inventory Means for You | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151414/20210128-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151414/20210128-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151414/20210128-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>The real estate market is expected to do <a href="https://www.simplifyingthemarket.com/2020/12/16/3-reasons-to-be-optimistic-about-real-estate-in-2021/?a=712984-fa409495d5d70154d03a25e81e9540e2">very well</a> in 2021, with mortgage rates that are hovering at historic lows and forecasted by <a href="https://www.simplifyingthemarket.com/2020/12/31/four-expert-views-on-the-2021-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2">experts</a> to remain favorable throughout the year. One challenge to the housing industry, however, is the lack of homes available for sale today. Last week, the <em>National Association of Realtors </em>(NAR) released their <a href="https://www.nar.realtor/newsroom/existing-home-sales-rise-0-7-in-december-annual-sales-see-highest-level-since-2006">Existing Home Sales Report</a>, which shows that the inventory of homes for sale is currently at an all-time low. The report explains:<span id="more-43767"></span></p>
<blockquote>
<p><em>“Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). <strong>Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace</strong>, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.”<br/>
(See graph below):</em></p>
</blockquote>
<p><a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151411/20200128-MEM-Eng-1.jpg"><img alt="What Record-Low Housing Inventory Means for You | Simplifying The Market" class="aligncenter wp-image-43768" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151411/20200128-MEM-Eng-1.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151411/20200128-MEM-Eng-1.jpg 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/01/26151411/20200128-MEM-Eng-1-400×300.jpg 400w" width="650"/></a></p>
<h4><strong>What Does This Mean for You?</strong></h4>
<h5><strong>If You’re a Buyer:</strong></h5>
<p>Be patient during your home search. It may take time to find a home you love. Once you do, however, <a href="https://www.simplifyingthemarket.com/2020/12/11/winning-as-a-buyer-in-a-sellers-market-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">be ready</a> to move forward quickly. Get <a href="https://www.simplifyingthemarket.com/2020/08/27/why-is-it-so-important-to-be-pre-approved-in-the-homebuying-process/?a=712984-fa409495d5d70154d03a25e81e9540e2">pre-approved</a> for a mortgage, be prepared to make a competitive offer from the start, and know that a shortage in inventory could mean you’ll enter a <a href="https://www.simplifyingthemarket.com/2020/10/16/how-to-prepare-for-a-bidding-war-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">bidding war</a>. Calculate just how far you’re willing to go to secure a home and lean on your real estate professional as an expert guide along the way. The good news is, more inventory is likely headed to the market soon, Lawrence Yun, <em>Chief Economist</em> at NAR, notes:</p>
<blockquote>
<p><em>“To their credit, <strong>homebuilders and construction companies have increased efforts to build</strong>, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes…However, it will take vigorous new home construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand.”</em></p>
</blockquote>
<h5><strong>If You’re a Seller:</strong></h5>
<p>Realize that, in some ways, you’re in the driver’s seat. When there’s a shortage of an item at the same time there’s a strong demand for it, the <a href="https://www.simplifyingthemarket.com/2020/12/10/why-it-makes-sense-to-sell-your-house-this-holiday-season/?a=712984-fa409495d5d70154d03a25e81e9540e2">seller</a> is in a good position to negotiate the best possible terms. Whether it’s the price, moving date, possible repairs, or anything else, you’ll be able to request more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.</p>
<h3><strong>Bottom Line</strong></h3>
<p>The housing market will remain strong throughout 2021. Know what that means for you, whether you’re buying, selling, or doing both.</p>
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