Learning The Secrets About Homes

Reasons for Low Housing Inventory: Jeff Rutt’s Take

The unavailability of sufficient homes for sale in real estate follows demand and supply curves, resulting in a higher cost for each unit. Yet, what would cause a shortage of housing supply when there are many people seeking to buy? Let’s see Keystone Custom Home’s Jeff Rutt try to explain low housing inventory below:

Equity Inadequacy

To be eligible to sell a property, a person is expected to have a higher stake in its ownership. However, studies suggest that 20% of people still paying their mortgage have not acquired enough equity on their real estate to be able to sell. Due to these homes not being ready for sale, you should expect a low housing supply.
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Counting on Profitability
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When a lot of people don’t have an issue with selling their property except for the fact that the timing is not right to make profit, you’re going to have less homes on sale in the property market. About 10 years ago, millions of homes were bought at the peak of the property boom. Very many people that purchased properties at that time are to date waiting for the right moment to make profit, even if their mortgages are not underwater. This is another factor that leads to low housing and higher costs.

Buyers Refrain

Of course, very few homes would be built when there’s low buyer interest, and that does affect housing supply. As per Jeff Rutt, issues like price fluctuations and lack of enough homes have resulted in buyers, who subtly influence the property market, holding off their aspirations to buy.

The Allure of Keeping Investment Properties

A lot of people are making good money as landlords due to the lucrative rental fees they get every month. Likewise, there’s the possibility of properties appreciating in value and fetching a greater selling price later. As such, individuals that acquire residential investment properties, for example single-family units, may not be ready to put these on sale in the foreseeable future. Again, that’s a factor to explain low housing inventory.

Lack of Enough Builders

According to Jeff Rutt from Keystone Custom Homes, the low housing inventory issue may be explained by the lack of enough property developers. As a matter of fact, the 2007 financial crisis caused a lot of smaller home builders to collapse, and the few that endured resort to selling off their prime properties put aside for later development.

If you’re reading reviews of Jeff Rutt from Keystone Custom Homes today, you’ll see that he’s been involved in the development of high quality residential properties that suit detailed specifications provided by owner, from the ground up.