For consumers, the housing shortage plaguing much of the nation has been a consistent thorn in their sides. But for home builders and investors, the housing shortage can be interpreted as a sign of healthy growth. Instead of overexerting the market as they did in 2008, home builders and investors are cautious even amid the signs of a revitalized housing industry. Instead of exploding into a building frenzy, companies are building for what their budget allows, which is often not swaths of entry-level houses—an unfortunate caveat for those looking for affordable housing but a necessary step to avoid another housing market crash.
The U.S. housing shortage may be frustrating consumers, but the housing market is in a “very healthy state” compared with a decade ago, Marcus & Millichap CEO Hessam Nadji said Friday.
“The lack of speculation now being applied versus other expansions by the developers ... not only is that not happening because of lenders being more conservative, but builders themselves have become smarter,” he said on “Power Lunch,” adding “they are preventing the lessons — if you will, the hard lessons — learned in 2008-2009 from happening again.”
Marcus & Millichap is a real estate investment services firm with offices in the United States and Canada.
There were about 1.66 million homes on the market at the end of November, which the National Association of Realtors says is the lowest on record for the month. Supply is down 5.7% from the year prior. When low supply meets high demand, prices surge. The median sales price for existing homes came in at $271,300 last month, which is also a record-high reading by the realtors association.