Interest rates are currently high and home sale volume is declining. While some home prices are stabilizing or even decreasing slightly, there is still a shortage of inventory in many areas. Demand for quality homes in good condition and desirable neighborhoods is still outpacing supply. Despite a potential decrease in buyers in some areas, there are still more people looking to purchase homes than there are homes available. This shortage of inventory is keeping prices high even with high interest rates.
The issue is exacerbated by the fact that many potential sellers are hesitant to put their homes on the market. Some are hoping to sell for prices similar to those seen in 2021 and 2022, while others are concerned about being rejected by potential buyers. As a result, there is a significant amount of supply that is not entering the marketplace, which is artificially keeping prices high.
Furthermore, no new homes are being built to meet the demand for 2020 and 2025, which will only exacerbate the current shortage. When more sellers do eventually put their homes on the market, there will likely be a surge in demand for them. However, many homes that are currently available require significant repairs and renovations. This presents an opportunity for builders and contractors to rehab these homes and offer them at lower prices.
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