Vanishing Houses ...
A mind-blowing 32% fewer homes have come on the market below $750,000 so far this year. Over time, just about everything becomes more expensive. After a while, society digests the higher values. Gasoline was $1.12 per gallon back in 2002, compared to $4.20 today. A visit to the Magic Kingdom would set a Mickey Mouse fan back $41 back in 2000, a lot cheaper than the $114 Disneyland ticket this month. In 2010, mouth-watering, sliced bacon was selling for $3.86 per pound versus $5.85 today. Change is inevitable, and so are higher prices.
As home prices have appreciated over the years, the lower price ranges have dwindled and became a smaller percentage of the housing stock. It is not merely the fact that fewer homeowners within these more affordable price ranges have not placed their homes on the market; instead, it has more to do with home values appreciating and surpassing the lower range thresholds. These ranges are vanishing.
The erosion of more affordable housing has been going on for years. This trend will continue as long as the market remains hot. With a depressed, unfathomably low inventory and unrelenting demand fueled by record low rates, this sizzling market is poised to continue for quite some time. The torrid pace will remain through the end of 2021 and is poised to endure through 2022 as well.
For buyers anticipating more homes in the affordable price ranges coming on the market soon, it is just not going to happen. The number of opportunities is diminishing over time. Buyers who wait will be confronted with fewer available options to purchase. More and more homes are surpassing the $500,000 and $750,000 thresholds.
The bottom line: while it may be challenging to find a home in the lower ranges today, as homes appreciate, it will only become more challenging in the future.