Realtor.com's chief economist Danielle Hale says that current market conditions are "the most competitive in recorded history." Underbuilding and demographic shifts are among the key factors exacerbating unbalanced supply and demand.
Supply on the housing market has decreased for 42 consecutive months, and went down 8.5 percent this year from 2017, according to Realtor.com data. While buyer demand is already hot, it may get hotter in the years to come. Millennials are, or soon will be, reaching "prime homebuying age," as the biggest cohort of the generation will turn 30 in 2020, per Curbed. Meanwhile, downsizing Baby Boomers are vying for similar smaller, starter-type homes as Millennials, a dynamic that is making buyer competition ever more fierce.
A Realtor.com survey of potential buyers found that 40 percent plan to put more than 20 percent down, and 26 percent are willing to pay above asking price. A survey in early March by Toluna Research found that 40 percent of current buyers have been searching for more than seven months. “Buyers right now are staying informed and signaling they’re serious, that’s how they’re staying competitive,” says Hale.
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