August 11, 2019
Why Some Think Builders Aren’t Improving Single-Family Housing Availability
In our last post we made brief mention of an early 2019 rise in the confidence of builders, as reflected by an increase in the number of housing starts as compared to late 2018. Among those housing starts, we briefly highlighted the single-family market, which in January 2019 showed a full 25.1 percent rise over December’s number, and came in at 4.5 percent higher than January 2018.
Unfortunately, this rate still sits at an unfortunate low among this sector of building activity.
Why should that be?
Well, though an economy with low unemployment would seem to indicate that there are more consumers at large with money to spend on new homes for themselves and their families, that low level of unemployment also applies to the construction industry. Which is to say: there’s a shortage of labor in the construction market, which saw its activity drop out during and in the aftermath of the 2007-2008 crisis—which diverted the interests and pursuits of workers who might otherwise have sought skills in construction into other fields. (Skittishness remains in every element of housing after that frightening event. Nobody wants to place all of their eggs into a basket whose bottom can simply fall out. One can hardly blame them for not wanting to be penniless.) All this to say: there aren’t enough people out there making single-family houses for the number of people who want them. That’s why prices of the houses at market have been increasing so much in the past few years—even the recent, much ballyhooed “slowdown” referred mainly to the fact that prices aren’t increasing at such a rapid clip.
Understandably, construction companies would rather pour the skilled labor they have available to them into highly-profitable housing projects—especially since they know they are likely to be bought and filled—than into lower-priced starter homes. And yet the starter-home market is the portion of the market that most needs an increase in inventory, if only to keep an entire generation from being left out of the housing market altogether.
But there are still existing homes on the market, and some can be found for reasonable prices despite the overall trend. AtTopouzis & Associates, P.C., our goal is to put our considerable experience and expertise to use in ensuring that any title we service is issued to buyers clear of defect. Contact us if you want our professional judgment, backed up with a solid insurance plan.