In 2017, I sat in on a discussion of housing trends. One of the key takeaways at the presentation was the fact that as a country, we’ve been under-building since the Great Recession. Now, it’s coming home to roost.
I’m going to share regional and national trends directly from that discussion. Remember — this is information from 2017.
- The homeownership rate in San Francisco was 57.3%, 47% in Santa Clara/Sunnyvale, and 31% in New York. The national average was 63.4%.The median home price in San Francisco was $908,000 in the first half of 2017.
- Median household income was $77,734 and average household income was $104,879 at the end of 2016.
- In 2016, there were a total of 1.1 million units of single and multi-family homes.
- The ten-year average through 2016 was 980,000.
- The ten-year average through 2005 was 1.6 million.
- The nation was 400,000 to 600,000 units per year short of demand.
- In May 2017, both the national median of $252,800 and the national average of $294,600 set new U.S. records for existing homes.
Fast forward to 2021 and a global pandemic, and we’re in a perfect storm. Lack of inventory nationwide — directly due to under building — is causing housing costs to skyrocket almost anywhere in the U.S. Alaska is a strange exception.
How bad is it?
“For over a decade, we’ve had a chronic lack of supply of housing,” says Marco Santarelli of Norada Real Estate Investment. “We need 1.62 million units a year to keep pace with organic demand, but we produce significantly less. We’re about 370,000 units short each year.”
What Does This Mean for the Average Homebuyer?
It’s competitive out there and it doesn’t look like it’s going to be any less so anytime soon. One of the possible influxes of inventory might be landlords getting out of the market. But aside from that, if you’re in the market to buy, make a plan and use an agent that knows both the market and the upcoming inventory.