A Realtor’s Insights into Alleviating the Housing Shortage Crisis
The real estate market is experiencing a severe shortage in inventory. People just aren’t putting their houses on the market fast enough. Here’s how that can change.
Back in 2020, it seemed like everything was in low supply - antibacterial soap, disinfectant, toilet paper, and so on. Even things that weren’t even associated with the pandemic were hard to come by. But, housing? Housing is one of those things that you’d never think would be hard to find. There are always people selling their homes. There are always people needing to find a rental home or purchase a home. The shelter is, after all, a basic necessity in life.
However, according to HomeLight's 2021 agent survey, much of the country is experiencing a housing shortage. It’s a strong seller’s market, yet buyers are snatching up houses faster than sellers are willing to list them!
Is there any way the housing crisis can be alleviated? Will we continue to experience a market that feels like in order to become a homeowner, you need to be rolling in the dough and willing to sell your left leg?
Maybe not, and here are a few things that could balance out the market.
Vaccines
50% of surveyed real estate agents believe that as more people get the vaccine, people would be more likely to enter the market, therefore creating more inventory. In fact, 53.6% of agents say that even if sellers are hesitant to put it up for sale now, they’re making plans to list in the near future.
Keep in mind that although the vaccine is being distributed across the nation, there are some areas where the vaccine distribution has yet to make a difference. This could be because the populace is reluctant to get the vaccine or it’s difficult to get the vaccine due to accessibility.
Selling of secondary or vacation homes
The prospect of remote work becoming a full-time benefit could be a reason why some homeowners who have more than one property consider selling. 49% of agents said families that have purchased a secondary or vacation home are likely to choose the location that best suits their family's needs. They may sell the property or put it up for rent for at least part of the year. So while this may not benefit buyers, it may help the rental market, as it’s experiencing a shortage as well.
Tax incentives
First-time home buyers can benefit from the Biden administration’s $15,000 first-time buyer advanceable tax credit, which allows first-time buyers to access the $15,000 right away to use as a down payment, instead of waiting until tax time the following year. However, this incentive could lead to more inventory shortages, especially when you factor in the low interest rates.
However, if there was a tax incentive geared toward sellers, it could encourage more people to put their homes on the market. One way they could do this is by having a period where sellers would be exempt from the capital gains tax. If a seller (be they a homeowner or an investor selling off a rental property) was to sell their home and profit between $250k and $500k, they wouldn’t be taxed on that profit.
The housing shortage won’t last forever
There are a lot more buyers out there and if inventory doesn’t pick up, it could be a big problem - especially if those people are looking to buy and sell at the same time. They may be able to sell their house but then they have to worry about finding a new house in a very competitive market!
We don’t have all the answers and we don’t know when the market will even out. However, we do know that it’s not going to last forever, and if you’re thinking about selling and finding a new home isn’t a concern, then now is definitely a great time to list - not only for your wallet but to help satisfy demand.
To learn more about the Prescott, Arizona real estate market contact Mike Eastwood CEO of West USA Realty of Prescott at 928-636-1500 or visit us at www.westusaofprescott.com
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