A housing shortage occurs when the actual supply of homes is not able to be abreast of demand. Like last year, we had to face a shortage of houses and price madness we did hope would all end in 2017. We do have reasons to fear of housing shortage if we would like to buy one, but we can nurse hopes if we are owners of some valuable properties.
According to Foreman Auction who do many house auctions in Springfield, MO say the shortage hasn’t been solved yet so the first-time buyers have been crowded out as they can’t afford to repay mortgages since the market turned in a totally other direction. Those homeowners who would like to take the second step: moving from a starter home to a better one – can’t do that. The main goal is to find the right property at an adequate and affordable price for many people who are potential buyers. So comparing to past years increased prices of homes is important partly due to the still quite high mortgage rates.
The other reason for housing shortage is buy-to-let properties gaining popularity for both individuals and institutional investors who search for a good investment to get a return for their cash. When the shortage occurs, there can be some reasons for it, but in the case of US housing market, the shortage is said to originate in the consumers’ low confidence linked with lots of underwater homeowners. We can see that there are many factors in the housing market that can influence it, but there is another one which was significant in the last few years: homeowners did put their homes on the market very slowly so they couldn’t follow demand.
Of course, there are factors that influence the demand such as affordability, home prices, confidence, population, mortgage availability, and rates. Affordability means that the incomes increase and buyers can afford to buy the proper home for themselves. Demand for houses also depends on the buyers’ confidence about the housing market or the future of the economy. If the people have confidence, the demand will extremely grow that we can see nowadays in connection with the housing shortage. The population is also an essential factor to see increased demands: it is not the only number that means demographic changes, for instance, a higher number of single people want to live alone, so the houses demand to grow in the market.
As a result of all the factors of shortage and need, we can easily realize that there will be a fierce competition in bidding for the houses. The great summer house shortage is coming, and there are a large number of potential buyers who would like to find their dream home or at least take the second step forward to have a cozy, comfortable home. Until the housing shortage is solved by governmental and local governmental finance and regulation, the housing shortage will not decrease since more houses should be put up. Although the answer is not so easy for any development needs suitable local infrastructure and available land. Until then this summer will pass with bidding wars.