As we enter the summer months, the busiest time for purchasing a home, a common problem across the United States is facing the next generation of potential homebuyers. Although many Millennials have delayed marriage and children, they are reaching the age where it is “getting real” and they are wanting to purchase their first home.
We should all have an image of our dream house but then acknowledge the actual home we are able to afford. While many in Generation X may have missed the opportunity to purchase their top choice during their search for their first home, they knew there was always going to be another home to purchase. Historically, the housing market has had a 6-month availability of housing inventory that was actively available for sale on the market at any given time. Today, with less than 60 days of housing inventory available and multi-bid situations becoming the norm, if first-time homebuyers miss an opportunity to purchase a home they like and are able to afford, they may be waiting a very long time before they can be in a position to submit the winning offer on a home they want.
What does 10 years of record lows in new home construction look like? What does it mean for the future of first-time homebuyers? Take a look at the chart below from the Commerce Department.
As a nation we are building too few single family homes. The nation has not seen an extended timeframe with a low level of new home sales activity per adult population like this since prior to 1965. A generation of 4 million people are continuing to turn 31 every year across the nation and we are only building around 800K new homes annually. The cycle we are in of historic low levels of new construction is not bent, it’s broken. Correcting this long-term challenge will require alignment of local and national government agencies and private equity to target a solution that requires all of them to be involved in solving this problem.
How is this going to affect your real estate business and your income? Goal orientated individuals realize that it’s not only the market that determines their future, but how they approach the market. For instance, 30% of homes in Southern California markets sold in Q1 without being entered into the MLS system. The amount of pocket listings held out of the MLS by brokerages and agents are growing and will be coming to your market.
My plan is to help you develop the mindset you need and the activities to perform in order to succeed as a top-performing real estate agent in this market. Homebuyers and sellers need local market expertise, and to be a successful real estate agent you must own that position in the mind of your consumers.
Join me at Amplified Selling in Richmond and Fredericksburg, Virginia June 20 and 22 and learn how to tune up your activity to amplify your results.
To your success,
United Real Estate