According to the Florida Realtors® Association, the hot real estate market is prompting some buyers to fear that the housing market is overinflated and that the bubble will pop and demand and pricing will drop. This is not 2007 - 2008, according to numerous economists. Lawrence Yun, chief economist for the National Association of Realtors (NAR), said recently that “this is not a bubble. It is simply lack of supply.” Housing inventories are low, credit remains tight, and lenders are not issuing risky loans, he noted. What people do not realize in general is how little inventory there is. According to the NAR, in Florida, inventory across all property types including manufactured homes, condos and single family homes was down 47 percent from this time a year ago.
Why are there so few homes? According to a study by the NAR, the following are the most important factors:
People are staying in homes longer. Historically the typical hold period of a home in the U.S. is 6 to 7 years. That has extended to 10 years so there are fewer existing homes going onto the market.
Lack of new construction. After the real estate crash in 2007, many builders did not survive and those who did built fewer homes. Throughout the U.S., there is less land available, more regulations and less skilled labor, and economists predict there will never be the rampant development that was seen in the early 2000s. Low interest rates have enticed current buyers to purchase now rather than wait.
With so many more buyers looking for homes, they are willing to pay more than list price and can afford to do so when borrowing costs are low. Even though manufactured home loans have higher interest rates than conventional loans, they are still at the lowest rates the industry has seen in recent years, according to Broker Marty Pozgay.