Markets with a bigger recent price increases will have lower inventory because higher home values make affordability worse.Markets with a higher share of investors will have low inventory because investors sit on homes and rent them out.We standardized inventory by dividing inventory by the number of occupied homes in that market. To test the impact of five popular explanations of why inventory is low across the 100 largest housing markets, we ran a regression model (see below for details) on the number of homes for sale in a market in 2017 Q2. Every one percentage point increase in the housing stock owned by those aged 55 and over is, on average, correlated with inventory that is actually 3.6% higher. Older households – by hanging on to their homes – aren’t necessarily driving down inventory, at least not yet.Every one percentage point increase in the housing stock owned by investors in a market is, on average, correlated with inventory that is 2.8% lower. Investor ownership is tied to lower inventory.Every one percentage point increase in a market’s housing stock between 20 is, on average, correlated with inventory that is approximately 13% higher. New home construction is strongly related to inventory.Across the 100 largest metros, our findings show that: The surprising news? Homebuilding’s impact – or a lack of it in some places – is by far and away the biggest influence when it comes to inventory woes, outweighing other explanations by a large margin. The good news is that we found a statistically significant effect for each, which means there is some direct correlation with inventory. To remedy this, we tested each of the five major hypotheses while controlling for the impact of each other hypotheses. To be fair, we’re just as guilty as anyone of looking at possible reasons for low inventory in in isolation when we looked at rising home values and a widening price gap. When you wear statistical blinders, you run the risk of ignoring potentially more impactful factors when you’re trying to identify the cause of a problem. To date, these educated guesses have primarily been tested in isolation through simple correlations with inventory, with little or no regard to analyzing what their impact is relative to other factors. Here are the five leading theories: (1) investors bought up too many foreclosures during the bust and are hording them as rentals, (2) rising prices have made buying a home unaffordable, (3) owners don’t want to sell if they don’t think they can buy another home, (4) too many home-owning boomers can’t or don’t want to move, and (5) owners who want to trade up can’t find an affordable home at the next level. What they don’t agree on is why.Īs home inventory sits near post-recession lows, there are many hypotheses on why there are so few homes for sale today. housing market is being squeezed by low inventory.
0 kommentar(er)
