Between 2007 and 2020, homebuilders started 9.9 million new homes. That’s an average of more than 708,000 homes per year. However, according to the US Census Bureau, between 1959 and 2006, homebuilders average 1.1 million annual new housing starts. Over the last 14 years, the US has averaged a yearly shortfall of nearly 400,000 new housing starts.
The new housing start gap totals 5.5 million new homes that builders did not build since 2007. Contributing to the decline was construction industry labor shortages. A lack of skilled workers has plagued homebuilders with a loss of 2.3 million jobs between 2006 and 2011, The Wall Street Journal reports.
According to the Home Builders Institute, builders still face a labor shortage, impacting their ability to build more homes. The stark reality is, according to new homes expert Ben Caballero of HomesUSA.com, even if builders could double their average starts and create 2 million homes per year, it would take six years to achieve a supply-and-demand balance.
What can agents do to increase inventory?
Perhaps the greatest challenge in today’s real estate marketplace is a lack of inventory of homes for sale. Knowing that building more homes will not be enough to close the housing gap, real estate agents can help unlock existing inventory.
How? By reaching out to your entire sphere, especially past clients – even those who bought a home two years ago – and offer to show them what their house is really worth.
Timing is everything
For more than a year, throughout most of the US, real estate has experienced one of its strongest seller’s markets ever. Combined with a lack of inventory, average home prices have rapidly accelerated. According to CoreLogic, national home prices increased to record highs in May – with year-over-year home price increases at the highest level since 2005.
Today, most homeowners do not realize how much equity they currently have tied up in their homes today because of the recent surge in home prices. In many markets, the popular online valuation estimates simply can’t keep up with the pace of home price changes.
As a real estate agent, you are the trusted local expert who knows your real estate market better than anyone. By offering a Comparable Market Analysts to your clients, you can tap into the curiosity that sends millions of consumers online looking to see what their home is worth.
What the online estimates cannot provide local homeowners, you and your expertise can. Giving homeowners insight into what their home is worth and exposing the current equity they have could turn owners into sellers.
Sharing “sold” prices
Another way you can help homeowners understand the opportunity that today’s market offers is to share, when the data is publicly available, sold prices. For example, showing local homeowners the original listing price and the final sales price of recently sold homes in the neighborhood they live in could be a tipping point for starting conversations about selling.
A homeowner educated about what is happening with home prices in today’s market can become your next listing.
More flexibility than ever
The pandemic, for many homeowners, has changed their thinking about their current home. Working from home caused both a deep appreciation of the features homeowners appreciated about their place and exposed features they did not have and now desire.
Coupled with more employers than ever offering permanent remote working options, more homeowners have new flexibility to move and work from anywhere than ever before. By providing them with a CMA showing their current home’s value, you have a recipe to create a new seller.
Finally, when you help unlock inventory by turning a homeowner into a seller, give them peace of mind by recommending a seller home warranty from Cinch. As inspections are commonly being waived, having a seller’s home warranty that transfers to the buyer is one smart move. Learn more at cinchrealestate.com.