A good home is hard to find — and as the housing market gradually recovers, buyers are facing a lack of inventory.
First, the good news: US housing starts rose nearly 28 percent from February 2012 to February 2013 to a 917,000-unit annual rate, the Commerce Department announced this week. Permits for construction increased 4.6 percent to an annual rate of 946,000 units, the fastest pace since June 2008.
Also in February, employers added 48,000 construction jobs, the most since before the recession, according to a Labor Department report released earlier this month.
Developers of single-family residences are on pace to deliver 618,0000 new homes this year, the Wall Street Journal reported. At the apex of the market in January 2006, builders were on pace to create almost three times as many homes, at 1.82 million.
So why the inventory squeeze? First off, builders are struggling to meet demand, due to delays in getting permits and finding construction workers, the New York Times reported.
Confidence among US homebuilders fell this month, according to The National Association of Home Builders/Wells Fargo Housing Market Index. Concerns included the scarcity of ready-to-build land, building materials and workers relative to new-home demand. This was the second decline in builder confidence since January, which was preceded by eight consecutive monthly gains.
Simultaneously, homeowners are reluctant to sell, either because they’re waiting for even higher prices or because they might not be able to find another home in the frantic buying market.
Baltimore real estate agent Lynn Ikle told NPR, “There’s a panic feeling out there… It’s like McDonald’s. They want to just order it, go around to the next window and pick it up.” The inventory in Baltimore is down 47 percent from last year, NPR reported.
Sacramento has seen one of the most dramatic resurgences, with median sales price rising 15 percent over the last year, according to Zillow. “In my 27 years I’ve never seen inventories this low,” Lyon Real Estate broker Kurt K. Colgan told the New York Times. “I’ve also never seen a market turn so quickly.”