All Things Real Estate: Solving housing dilemma is a waiting game

All Things Real Estate: Solving housing dilemma is a waiting game

The housing quandry is still with us here on Long Island. When checking around the nation, inventory has increased in certain areas, but for the majority of locations and states, we are still way below the normal inventory level of six to seven months.

We are currently still historically deficient in approximately 6 million homes as we need 2 million new homes per year.

The greatest demand is occurring from the millennials who are at their peak home-buying age. Gen Z and Gen X are also entering their next stage and are coming on board by either starting and/or growing a family or leaving the rental market to enter into the purchasing zone to become owners.

Homeownership is still on their radar as the safest and mostbbeneficial way to create and build their future wealth. I believe they are no different than their parents were when they began their homeownership journey back in the 1940s-1970s.

However, the obvious change is that we baby boomers are not moving as they did years ago. Some of us prefer to age in place. Others can attribute the stagnation to the increase in interest rates.

Moreover, the other factor is that so many of us either had refinanced over two years ago and prefer not to take on a higher rate that might be two to three times greater in cost. Lastly, some may not have enough equity to pay cash, so it’s a bit of a dichotomy.

Downsizing may be another issue as inventory is still at historic lows; some may want to rent and then there are those who while considering downsizing will prefer to still own.

Depending on your age, you may need and want to discuss this with your children and have them be on the deed of anything you purchase.

If you have investments in real estate, stocks, bonds, and even businesses and other financial assets for estate purposes, you should always seek the assistance of a professional CPA, CFP, or eldercare attorney when it comes to taxes or financial planning, especially when it comes to your Will, Healthcare Proxy and Power of Attorney.

Lastly, keep in mind there is a five-year lookback from when you filed your Medicaid application, so be prudent and be aware and smart in your planning.

Five states — Kansas, Washington, Nebraska, Utah, and Missouri — have averaged less than one month of inventory since the beginning of 2022.

Housing stock in the U.S. fell from 2,194,184 units in May 2012 to 629,904 in January 2022; a net decrease of over 1,500,000.

However, as rates increased 11 times along with a rise in home construction during the COVID-19 pandemic, the U.S. housing inventory was finally showing signs of growing after many years of decreasing.

From January 2022-October 2022, housing inventory increased from 629,904 to 1,173,927. This was a promising situation for buyers hoping that prices would come down.

Increases occurred in the following states: at the top was Mesa, Aziz. at 87.9%; San Diego, Calif., up 29.1%; Florida, up 45.8%; Louisiana, up 28%; Alabama, up 27%; Arkansas, up 27.2%; Mississippi, up 28%; Texas,  up 22.8%; North Carolina, up 17.8%.

The high-interest rates and highest prices in over 50 years are the culprits for the major increases  As these increases continue those holding out and waiting just might continue to see prices moderating further, allowing more to enter the market to purchase.

As long as demand stays stronger than normal, inventory will presumably take many years in getting back to a normal state.

Inventory decreased during the same time in the following states: NY -7.3%, NJ -9.1%, CT -7.6%, Mass -7%, Denver -32%, Illinois -9.8%, NJ -9.1%, Idaho -9.1%, and Rhode Island -7.8%

However, in contrast, eight states have averaged more than two months supply, including expensive states like New York, New Jersey, and Hawaii. Within the Metro areas, the locations with the lowest levels of housing included the hot markets of Denver, Color; Seattle, Wash; and San Jose, Calif. These statistics were derived from in-depth research from:

Housing inventory has been increasing since 2023, due to the higher interest rates and lower-than-normal sales as many sit on the sidelines waiting for lower rates, decreased prices, as well as greater choices.

Decisions to move out West and to some states down South may be your solution to lowering your costs, especially if you are considering cashing out in Long Island and NYC. Whatever you decide, do your homework and due diligence before making your move.

I want to wish everyone a Healthy and Happy Passover Holiday.

Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. For a free 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] or via https://WWW.Li-RealEstate.Com

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