MANY U.S. COMMUNITIES SEEING REAL ESTATE INVENTORY AND LEAD SHORTAGE LEON MCKENZIE
One of the most pronounced trends in the market
Decreased
construction
means
that
more
recently has been the tightening of real estate inventory
homeowners and business owners are staying
and, consequently, a shortage of leads. This trend has
where they are in terms of their location.
paralyzed many real estate professionals and prevented
Homeowners and business owners who would like to
them from finding and making the deals that will take
relocate to a new home or office space simply don’t
their business to the next level. The contributing factors
have any options from which to choose. This means
to this problem come from many areas. Knowing a bit
that people are more likely to pursue the option of
about the factors that are causing the issue will help you
remodeling or adding on space rather than going out
to navigate the current changes in the market.
into the real estate market and looking for a new
residential or commercial property.
Contributing Factors to Real Estate Shortage
Heavens said that it can be challenging to try to
There are a myriad of factors that may be affecting your
predict how much space will be needed in any given
real estate business and your ability to find good
year, “Predicting how much housing is needed
properties – both on the residential and the commercial
involves a complex calculus that weighs hard
side – that will lead to profits and excellent options for
statistics (newhome starts, sales of previously
your portfolio. Alan Heavens of the Philadelphia Inquirer
owned homes) against a certain amount of
reported, “Research from the National Association of
demographic tealeaf reading (householdformation
Realtors shows the U.S. needs to build 1.3 million to 1.7
forecasts). Thus, there isn't complete consensus on
million housing units annually to keep pace with yearly
what will be enough. ‘At current levels of housing
household formations averaging 1 million to 1.4 million,
construction and demand, the nation has just about
in addition to replacing the 300,000 obsolete dwellings
two years' worth of excess vacant homes for sale
that are razed each year. Statistics released two weeks
and rent,’ said Moody's Economy.com chief
ago by Freddie Mac, however, show that only 910,000
economist Mark Zandi.”2 Without additional
units were started in 2008 and 550,000 in 2009.
construction, many homeowners and those looking
Projected starts for 2010 are better, but just 700,000
for commercial space may find themselves
units.”1
frustrated.