The Scoop San Joaquin Market Update December 2018 Call 209-762-3552 For More Information It's Still A Seller's Market In 2017 on the market there were 783 homes. December 2018 closed
Why Are Lodi Existing Home Sales Down
Many experts are wondering about the trend, not only in Lodi, even nationwide. As we see the economy strengthening and unemployment rate going down. Also, wages are on the rise and interest rates near all-time lows. With all these positive indicators why aren’t existing home sales continuing to rise?
What we are seeing in the marketplace is that there are lots of buyers out there that are ready, willing, and able. When homes have the right price, as they come on the market they get bought up within the first few days.
What we see is a shortage of inventory. Plenty of buyers and not enough homes for them. It would seem then that the softening of the market is from a shortage of inventory, not a lack of buyers.
What Is The Cause Of The Housing Shortage?
Let’s check out the graph below,
Look at the new home construction, it is well below the levels from 1995 to 2002. A quote from a recent industry survey said;
Today’s housing concerns can be attributed to lower than normal new housing permits
You’re thinking we are talking about existing home sales slowing in Lodi, aren’t you? And the answer would be yes we are. What’s the correlation between new home construction and existing home sales, you ask?
The answer is existing Lodi homeowners are looking for upgrades in their homes. A home that match their needs and their lifestyles. And those home upgrades come in a new construction home. With the lower amount of new home construction, there are few choices for them. Hence, they aren’t placing their existing homes on the market. This is leading to the current shortage on inventory.
New home construction will lead to an increase in existing home inventory. This will lead to more existing Lodi home sales and a moderating of appreciation.
If you have any questions or would like to discuss buying or selling a home. Give us a call at 209-762-3552.
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