Lack of Housing Inventory Means Slim Pickings for America’s Would-Be Buyers

Across the country, prospective American homeowners are struggling to purchase properties. With fewer, yet more expensive choices on the market, it’s creating a stalemate between the seller and buyer that everyone is losing.

From market to market, reports are headlined with similar pessimism surrounding the status of America’s housing inventory: It’s smaller than it has been in a long, long while.

The Denver Post reported in early March that the city’s housing inventory was as small as it had been in over three decades. Denver isn’t alone, either—whether it’s Louisville, Orlando, or even Sioux Falls, the number of homes for sale across the country is slimmer than it has been in quite some time.

This means, very obviously, the deck is stacked against the buyer. Right now, there are fewer soon-to-be sellers because the majority of the time, they’ll be in the market for a replacement home. And they know better than anyone how slim the pickings are in the current market. In situations like this, the number of homes that make up existing inventory can also be misleading. While the national housing inventory fluctuates, the number of forced sales, like foreclosed homes, stays about the same. That means they’re now making up a larger part of the property sales than they were a year ago at this time.

Leigh Marcus, a Chicago-based realtor at @properties, provided a little insight as to how the dwindling inventory is affecting the market as a whole.

The basic law of supply and demand really runs the real estate market,” Marcus said.

At present, the number of homes available on the market is shrinking faster than the couch in Wayne Szalinski’s attic. However, buyers are remaining smart and well-researched. Because demand is so high, prices are too. But Marcus’ smarter buyers won’t budge. It’s as important as ever for buyers to be submitting the first bids on these freshly listed homes. From there, as bidding wars are cast, the real losers are those in the market for their first-ever house. It’s clearly not the time for potential homeowners to take their first dip into the housing pool.

“With the lower inventory right now, we are seeing higher prices, lower market time and multiple offers on homes,” Marcus said. “Buyers are still very educated on the market and are willing to pay top dollar if they feel like it’s worth it.”

But for a number of potential buyers—especially millennials—it might not be worth it right now. In the meantime, it’s likely that people will continue the renting trend until a drastic change shifts the housing inventory available.