In my last blog, I discussed one element that was currently affecting our housing market in regard to the perception of it being “ON FIRE”. What currently fuels that fire is the low inventory available, not necessarily meaning everyone is running out to buy a home. That is just not happening. Another contributor was building, which had basically come to a halt, and most developers were only putting up one home at a time. When they sold the home they were building, they put up another one.
When the rush came this past Spring, builders were taking purchase contracts but did not have the infrastructure to build the homes. Most were down to a skeleton crew and when ramping up a business where you are building homes, you reach out to your contractors, whom were also down to a skeleton crew. They in turn reach out to their suppliers, like companies that make drywall, or companies that manufacture wood, AND THEY WERE DOWN TO A SKELETON CREW! Notice the domino effect? Ramping up all of these businesses takes time and money and most importantly, PEOPLE.
So now the economy will start to grow as people are going back to work. Let’s get back to the point, which is when will the market return to a reasonable point, where buyers don’t feel they are losing hope, as there isn’t enough homes to see. Builders recognize this vacuum and they are racing to start up new developments and building the infractures of new sub divisions. If you have been traveling around the North Fulton/South Forsyth area, you may have noticed all of the new subdivisions starting to pop up around the community. I know of 12 new developments coming to the area. Once the builders start putting up inventory and homes, that is going to be the catalyst that will let the steam out of the pent up demand and bring resale and new home inventory back to a level where buyers will feel they have plenty to choose from. Once people have multiple choices, that is when downward pressure on pricing will begin again.
Look for my next blog when I discuss how interest rate effects your ability on how much home you can afford. Also feel free to call me or a team member to discuss builders in our general area. We would love to help you!