What is Happening in the Real Estate Market Right Now? Why are there so Few Homes for Sale?
I get this question on a daily basis — what the heck is happening in the housing market? Why is there NOTHING TO BUY?
If you’ve been looking for a house over the last few years, you’ve probably felt the pain of low inventory, little selection, and mad competition for even the homes that might have been less-than-desirable 5 or 10 years ago.
Believe me, as a real estate agent, it’s incredibly frustrating for me, too. There’s nothing I want to do more than help you move into your forever home. But there are a lot of forces at work that’s making this difficult — for all of us.
Let me start with a story. This is loosely based on my family, right here in Morris County.
My grandparents, Gwen and John, lived across the street from where I live right now. They had three daughters, and their daughters grew up and had families of their own. Then, another generation later, John and Gwen’s grandkids started to settle down and have kids. Today, more than 70 years after John and Gwen got married and settled down on their two acres in Chatham, there are five new growing families — including mine — who all need places to live.
Think about it — five new families from one. It’s a beautiful thing, but logistically, they can’t all live in the same house forever. They all need homes of their own.
And unfortunately, in the past 70 years, they haven’t made more land in Northern New Jersey — and the land that’s here has become increasingly expensive — as have the homes. So John and Gwen’s grandkids — and the grandkids of lots of people in their generation (aka today’s millenials) — have had to explore other options, like moving back in with their parents, renting a home or apartment vs. purchasing one, or going further afield to find a place to call their own.
Basically, there’s just not enough houses to go around — especially in highly dense and desirable areas like New Jersey.
But why?
One of the reasons we’re feeling the pain so acutely right now is because of something that happened not so long ago — the housing crash of 2008. After the “bubble burst,” many home builders went bankrupt, or out of business, or just became much more cautious and conservative in their approach to building homes and communities. And further down the chain, lots of skilled tradespeople found other jobs, which created a large gap in the ability to find and employ people who knew how to build houses.
As a result, there were about half as many housing starts from 2010–2020 as there were in the previous decade, even as the U.S. population grew more than 7 percent. Around the same time — 2020 — the Pandemic hit, and many people started searching for more space, including the Millenials — the largest group of homebuyers since the Baby Boomers hit the market in the 1960s and 70s.
The math proves that it’s the cliche “perfect storm” — and a recipe for chaos in the housing market.
How do we fix it?
Some thought that boosting interest rates would cool the market.
And they did — briefly — in the fall of 2022. But buyers are back in force this spring — most likely because they realize that they still need a place to live.
So — other than moving back in with your parents or building ANOTHER addition on the house you already have, how do we fix this problem? Answers and solutions vary.
Some have proposed new zoning laws to allow for greater density on the scant land we have. But many towns are pretty resistant to adding more people (and especially more students) to overburdened roads, schools and social services.
Others have proposed more affordable housing to release some of the pressure on existing inventory — but that also often meets resistance.
I’ll admit it — we’re a little stuck at the moment.
But with that said, I’m especially excited about language in Madison’s master plan about things like Accessory Dwelling Units, which could help expand options available while diversifying the market for renters and providing supplemental income for homeowners.
As population grows both in the Best Jersey Burbs and nationally, we’ll need to think more creatively and constructively to help solve the housing shortage. Our kids and our grandkids deserve our efforts — don’t you think?
What would you suggest to help solve this problem?
Thanks for tuning in today — I look forward to hearing your thoughts. This is Meg Mullin with Coldwell Banker, proudly representing and selling the Best Jersey Burbs.
