Whether you're looking to upgrade, downsize, or relocate, a good home is hard to find lately. Trulia Trends reports that January and February are primetime for online home searches in Florida. But buyer competition is fierce and bidding wars are not uncommon today. The National Association of Realtors reports a 21.6 percent drop in home inventory from a year ago. So, where have all the houses gone?
The Wall Street Journal poinpointed the reasons why so few houses are on the market today and they say there are six key factors to the lack of options.
Over 10 million homeowners owe more on their mortgages than their homes are worth. That means if they had to sell their home they'd lose all the equity (or lack thereof) they've put into their homes and take a hit on their credit reports. Ultimately they'd be better off sticking it out in their homes than facing a short sale.
Little or negative equity
Traditionally, when a homeowner wants to "trade-up" to a more desirable home they would have at least 20 percent equity in their current home to make a down payment on the new home. Since home values have been up and down in recent years many don't have that 20 percent equity to invest in a new home.
Everyone knows the market bottomed out and prices are the lowest we're going to see for a quite a while. Homeowners are reluctant to sell knowing their house is going to be fetch four, five, or six percent more if they wait a year to sell.
Investors, investors, investors
Investors who have traditionally purchased cheap homes, improved them and sold them for profit are also unwilling to sell at the bottom of the market and are renting their properties instead of flipping them right away.
Banks are taking their time since the robo-signing scandal of 2010. Slow foreclosure processes are preventing homes from getting back on the market in an efficient amount of time thus, smaller inventory.
Slower starts for new construction
This one might be more applicable to other regions because new construction in the Orlando area is huge right now. But still, construction is still slow to come back which means fewer options in the marketplace.