A recent article published this Spring with demographics and analysis from Realtor.com chief economist, Danielle Hale, addressed low inventory, demographic shifts and rising prices headed into the 2018 Summer real estate market.
Although these demographics are national, we are facing some of the same issues here in Southwest Louisiana, which creates a very competitive housing market. We are still lacking an inventory of “affordable housing” for first time home buyers here in Southwest Louisiana. There are many buyers but not a lot of sellers or inventory to fill the category.
Several factors have created this environment of high demand but low supply. Typically Underbuilding is the key factor. You may disagree because most Lake Charles residents notice new construction homes going up everywhere….however the price-point is not meeting the need for the first time home buyer. The high end of the housing marketing $450,000 range is seeing a 1-2 percent increase in inventory. Yet, the first time home buyers experience the shortage of affordable homes for sale.
The frustration comes for young adults or someone wishing to downsize because they are in competition for the same smaller homes, yet the older adult can lean on accumulated wealth of years of home ownership.
Millennial are reaching prime home buying age in 2020 this is when the greatest proportion of that generation will be turning 30. This collides with the baby boomers looking to down-size. When smaller homes in the $200,000 or below price point become available this is when fierce competition sets in with multiple bids and short market time.
We essentially have two types of buyers searching for the same inventory (which is smaller affordable size homes) which creates for a competitive market.
If you are a first time home buyer considering a home purchase in the near future, connect with me today so I can keep you alerted of the inventory and you can be in a position to make an offer when the time comes!
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