Ever since the Great Recession, far fewer homeowners have been selling their homes annually, and now even fewer are opting to participate in selling their homes.
Lack of Sellers-Fewer homeowners are opting to sell despite homes appreciating to record levels.
This is the time of year when Southern Californians flock to the beach to escape the heat and enjoy the cool surf of the Pacific Ocean. After a long day of jumping in and out of the water, chasing the waves, building sandcastles, and basking in the warmth of the sun, many experienced beach goers realize that they forgot to reapply sunscreen. Upon returning home and gazing in the mirror, they quickly confirm that they have a lobster red sunburn from head to toe. Nearly everybody has experienced the pain of this sunburn. The pain is a helpful reminder to never forget to reapply sunscreen again.
Similarly, homeowners across the nation watched the housing market take a brutal pounding during the Great Recession as their equity vanished in a blink. Many lost their homes to foreclosures or short sales. Everybody was either personally burned or they knew somebody who experienced the painful sting of the downturn. As a result, a new trend emerged to avoid that lobster red burn with staying power: homeowners remain in their homes for a lot longer. They are content in keeping their home. There are fewer homeowners who opt to sell every year, and even with record home values, the trend continues.
Buyers must understand that the low turnover rate in the housing stock is here to stay. The pandemic did not help the issue either. This trend is here to stay, which means that the anemic inventory is not going to change much for the rest of the year and into 2022 as well. Most homeowners are simply content with staying put. As a buyer, waiting for a lot more choices is futile. Buyers that opt to wait will be kicking themselves down the road. Instead, cashing in on today’s historically low rates now is the right move. The housing market has the legs to continue at its current trajectory for quite some time.