Is the end in sight for the inventory crisis? Yes, but experts can't agree on when..

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee you a cash offer on your home within 24 hours! 

Ok, so every week, I share market data to keep you informed with the local real estate market.  
Here is this week’s Boca Market Watch.

First, Single Family Homes:

44 new listings, kind of average, and ranging in price from $475K to $8.95M.  
19 homes back on the market, while 17 homes listed took a price decrease, and 9 sellers raised their asking price.  And  another poor week with 38 different properties under contract, and 39 going pending.  12 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And another decent week for sales with 45 homes closed in the past week,  ranging from $378K to $4.7 M!

Next up, Condos and Townhomes:

62 new listings, not too bad, and ranging from $83 Grand to $6.5 Million.  
16 units came back on the market, 10 properties with a price decrease, and 9 sellers with an increase.  And a so so week with 42 different properties under contract, and 36 going pending,  And just 8 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 66 closed sales this week, a decent week, and ranging in price from $78K to $6.35M.

Here's what's making news right now.

The inventory crisis gripping America’s housing supply will most likely let up in 2024, with some experts forecasting a longer wait, that's according to a new survey released yesterday by Zillow.

Thirty-eight percent of the housing market experts polled by Zillow believed that the housing market will return to 2019 levels by 2024 — at least in terms of metrics like inventory and the share of first time buyers in the market.

“Inventory and mortgage rates will determine how far and how fast home prices will rise this year and beyond,” Zillow Senior Economist Jeff Tucker said in a statement. “We are seeing new listings returning to the market, slowly, as we enter the hottest selling season of the year, but this supply deficit is going to take a long time to fill.”

Total inventory has fallen from a monthly average of 1.6 million units per month in 2018 and 2019, to just over 1 million per month in 2021, and just 729,000 units this month.  As you know, the shrinking supply of homes on the market has been a key driver of skyrocketing housing costs. That has all but shut out first time home buyers and has sent rent prices soaring through the roof. The share of first time buyers in the market dropped from 45 percent in 2019 to just 37 percent last year, a significant drop of 18%.

While 38 percent of the experts polled expected 2024 to be the year total inventory returns to 2019 levels, 36 percent were more optimistic, predicting 2023 as the year things would settle down; the balance, 26%, say that things won't get back to 2019 levels till 2025.  So would getting back to 2019 inventory levels in our area create a buyer's market?  Not even close -  in 2019, in Boca, we were already facing a relatively tight supply of just under 3 months of inventory - that's still a strong seller's market.  So if you're a buyer, that's not exactly great news.

I get buyers tell me all the time that the market is way over priced and that it HAS to come down.  When I ask why they think that, they'll typically say, because this is just another bubble and the market always corrects when it gets overheated like this.  While I appreciate their hopefulness, the market technical factors are not in their favor.

In the immediate future, experts predicted home values and rents to continue trending upwards, with Zillow economists predicting a 16.3 percent increase in typical home valuations between now and the end of the year.  That's about half the rate of appreciation we've experienced in the last year.  But if that's true, and prices only go up 16%, a $400,000 home today, will be $465,000 in December.  And with rents spiking up so dramatically, it's getting harder and harder for first time buyers to save money for their down payment and closing costs, putting their dream of home ownership even more out of reach.  If anything, it looks like we're going to continue to see more of the same into the forseeable future.

We live in interesting times...