In every industry, the professionals can be guilty of throwing around terms, including in real estate. One of those terms is "inventory." Often, when we hear that word, we think of boxes sitting on a shelf, but it also applies to housing.
Housing inventory refers to the number of houses available for sale, in comparison to the demand for those houses.
Right now, there are a lot of people buying, but not as many selling. That means inventory in West Michigan is very low.
At the end of 2008 when the housing market crashed, a lot of people lost significant wealth because their home values went down. For senior citizens who had no choice but to move, it hurt them the hardest. They didn't have time to wait for the market to go back up.
Real estate markets always go up and down. Right now we are in a significant up cycle, meaning that if you have been wondering if now is a good time - it is!
But won't it keep going up?
Have you ever heard the term "gambler's fallacy?" It means that people often see things going up, and assume it will keep going that way. They push their luck too far, and then lose everything.
I have seen this happen in real estate again and again as well.
The real estate high that we are seeing right now won't last forever, for several reasons:
1) Interest rates are starting to go back up. They couldn't stay at zero forever, and are likely to continue going up over the next few years. Higher interest rates affects buyer's ability to actually buy. Right now while interest rates are still low make it a great time to get your house on the market.
2) More building and development. Particularly in West Michigan we have a housing crisis. Not only are there more buyers than houses, there are more renters than houses. That has been pushing prices up, and up, and up. Developers and investors are taking notice and starting to build new units and developments.
3) Inflation. Inflation is always happening, meaning that the value of your home today will change later on, even if the dollar amount stays the same.
The only thing in life you can count on...
There is an old saying that the only thing you can count on is change. This is definitely true. While no one can predict exactly what will happen in the future, I can tell you that right now you are ideally positioned to make more of a profit that you are likely to otherwise.
If you have been putting off moving for one reason or another, maybe the current market conditions are the perfect excuse to get packing for your next adventure!