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Factors Behind Housing Supply Shortage: A Jeff Rutt’s Explanation

The unavailability of sufficient homes for sale in real estate follows demand and supply curves, resulting in a higher cost for each unit. Yet, what would cause a shortage of housing supply when there are many people seeking to buy? Here’s how to explain low housing inventory from the perspective of Jeff Rutt from Keystone Custom Homes:

Equity Inadequacy

For someone to be able to sell a home, the need to have sufficient equity on the property. Yet, statistics indicate that 20% of homeowners that are yet to fully repay their mortgage do not have sufficient equity on their homes to sell, Jeff Rutt asserts. Because such properties have not yet entered the market, you may anticipate a level of shortage.

Waiting to Sell for Profit

In case many homeowners would be willing to sell their property were it not for the fact that it’s not yet time to profit, there will certainly be less properties on sale in the real estate market. Millions of properties were purchased approximately 10 years ago when the housing boom was at its peak. Very many people that purchased properties at that time are to date waiting for the right moment to make profit, even if their mortgages are not underwater. That’s another reason for housing shortage that leads to higher prices.

Buyers’ Hold Off

Obviously, nobody would build homes for sale when a lot of buyers are holding off, and that can impact on housing supply. As per Jeff Rutt, issues like price fluctuations and lack of enough homes have resulted in buyers, who subtly influence the property market, holding off their aspirations to buy.

The Perks of Owning Investment Real Estate

Becoming landlords to make good money is attractive to many people, considering the monthly rental payments they can potentially receive. Likewise, there’s the possibility of properties appreciating in value and fetching a greater selling price later. So, people that buy residential investment properties, such as single-family homes, are not likely to offer these for sale any time soon. Also, that’s an issue that may explain low housing inventory.

Shortage of Property Developers

According to Jeff Rutt from Keystone Custom Homes, the low housing inventory issue may be explained by the lack of enough property developers. It follows that the 2007 financial crunch resulted in the collapse of many smaller property builders, and the few that survived had to sell of their stocks of prime real estate identified for future development.

If you’re reading reviews of Jeff Rutt from Keystone Custom Homes today, you’ll see that he’s been involved in the development of high quality residential properties that suit detailed specifications provided by owner, from the ground up.
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