Builders aren’t building homes fast enough to match increasing demand, according to a report from the National Association of Realtors (NAR).
Total existing home sales nationwide dropped 0.6 percent in March to 4.92 million from 4.95 million in February. Sales were still 10.3 percent higher than in March 2012, and NAR said a shortage of inventory caused the decline from February to March this year.
“Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity,” said NAR chief economist Lawrence Yun. “In the same timeframe, housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents.”
Windermere realtor Mike Kent said local conditions reflect the national trend.
“We’re right at that tipping point where we don’t have adequate product to meet the demands of those purchasing, especially first time homebuyers in the market for homes under $300,000,” he said.
For example, Kent said two of four recently built houses in the Harbor Shores subdivision on Bell Road have sold already and a third is under contract.
“The developers are trying to get houses built as quickly as possible,” Kent said.
The national median home price for all housing types was $184,000 in March, which is 12 percent higher than March 2012.
That increase was the strongest yearly gain since November 2005, when it rose 13 percent from a year earlier.
Kent noted that Canadian homebuyers heavily influence the local housing market, and the Department of Homeland Security’s interest in imposing a border-crossing fee is worrisome to local realtors.
In their 2014 budget proposal, the Department of Homeland Security is seeking funds from Congress to study the feasibility of a border-crossing fee from pedestrians and passenger vehicles.
“More than half of our buyers come from Canada,” Kent said, “so we’ll be watching this very closely.”
Another development likely to affect the local housing market is the sale of Semiahmoo Resort and golf courses.
“We’re optimistic that it will sell soon,” Kent said, noting that contract negotiations are currently underway. “Presumably, the buyers would begin a strong marketing campaign once they got it up and running. The jobs and revenue coming out of that would positively affect home sales.”