As we come out of the Health Crisis we roll into a new type of Housing Crisis
I have talked in the past few weeks about how the recent virus issue has had everyone at home but still active in Real Estate. Properties have been selling and buyers have been buying.
As the state opens up we have a whole new crisis in Saline County. And it doesn’t seem to be going away soon.
No, it is not what you think. The sky is not falling nor is the Real Estate market. Quite the contrary. As things start to open up we are in an inventory shortage in our area. There is a decent inventory of larger homes but inventory for the first time buyer is extremely scarce. It seems that the Covid-19 issue delayed many future buyers that wanted to move up to a larger home from putting their current home on the market. What this has done has created a huge lack of starter homes or smaller homes for people looking to downsize.
We would think that the obvious answer to more homes would be new construction. The problem is that only a few builders build for the first time homebuyer. Of all new homes being built only about 20% are priced under $200,000. Over 50% are in the $200,000-$400,000 range. The other 30% are over $400,000.
Let’s take a look at what I call the 2 L’s:
Lots – There is a shortage of land in Saline County at an affordable price, causing builders to move farther and farther out to keep costs down. This isn’t always an attractive option for those who want to stay close to work.
Lumber – The cost to build a new home is directly tied to the cost of the lot and the cost of the supplies needed to build the home. Lumber costs continue to escalate due to policies restricting the importation of Canadian lumber, making larger luxury homes an attractive option to recoup costs when selling, rather than building smaller single-family homes and making less profit.
From online viewings to showings and sales, there are positive signs since April that we could be turning a corner. But while buyers appear to be coming back to the market, sellers are not meeting the demand.
The question is, are potential sellers in our market aware that buyers are out there? If a client is ready and able to do so, this could be a great time for them to call me and list for a great price.
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-Doug Robinson/Baxley-Penfield-Moudy Realtors
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www.SalineCounty.RealEstate
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