It’s hard to believe we might actually be asking ourselves if there is a housing shortage, but take a look at this recent graphic posted by KCM Blog with data supplied by the National Association of Realtors.
It shows that while much of the nation should expect shadow inventory equal to 12 months or more, here in Washington State, we should only expect 4 months. Shadow inventory is homes that banks have already foreclosed upon, but have not yet listed for sale.
In addition, our “visible” inventory in Washington State is sitting at 4.98 months, according to Judy Williams of Chicago Title & Escrow. My own Skagit County is at a reasonable 8.05 months of supply, and Island County is at 9.39 months, but we’re already hearing reports of multiple offers on homes and offers above list price as less and less homes are available from which to choose.
Months supply is an estimate of how long it would take for the entire inventory of active listings to sell at the current page, assuming no new inventory comes onto the market. Economists consider a supply of 3-6 months to be a balanced market, meaning the market favors neither buyers nor sellers.
Oh, and don’t forget that New Home Trends has been projecting for years that we are under-built here in the Pacific Northwest for the amount of new jobs we’re bringing in, and it’s latest report is no different. That report states:
Between 2010 and 2020 the Puget Sound area will have a projected need for 211,691 households. Today we have an overall inventory of 180,502. The shortage is 31,099.
When you put all of that together, the conclusion is that we are at a unique point – unique to the rest of the nation – that we have a shortage of homes. Home buyers should take note and buy now before prices start heading up.