A nationwide housing shortage continues to plague key markets across the country, according to recent research from Housing Wire. Homebuyers in cities like Charlotte, North Carolina, Dallas and Houston are finding it difficult to find houses with optimal price points, as stocks lag and stickers rise.
Charlotte in need of starter homes
The number of available starter homes in the Charlotte area has fallen by more than 65 percent since 2012, according to Trulia research covered in the Charlotte Business Journal. At the same time, the median starter home price has risen 10 percent to just over $77,000. This perfect storm of low stocks and high prices presents challenges for buyers in the area, many of whom are of the millennial generation. In fact, the city has seen its population of young people grow faster than any other metropolitan area in the country, dominating hip hotspots like Austin and Los Angeles by a significant margin.
Unfortunately, many of these young residents are unable to purchase homes in the current climate. Approximately 20 percent of all searches in the area pertain to starter homes, which make up only 11 percent of the total stock, Housing Wire reported. Even older buyers looking for trade-up properties are struggling, as demand significantly outranks supply.
Buyers in Dallas grapple with increases
Throughout 2016, house hunters in Dallas struggled with climbing prices, even as construction crews put up new homes at historic rates, Dallas Business Journal reported. The problem had been long developing. Home prices in the area have risen more then 43 percent over last five years.
"It is stunning to see that kind of growth," Ted Wilson, a principal at the construction and real estate firm Residential Strategies, told the publication. "Obviously, the shortage of housing is causing this and builders, even being as busy as they can be, are not alleviating the demand or taking care of the shortage of homes."
Builders in the area are attempting to keep costs down but find it challenging to construct quality homes under the $200,000. Even with copious financial incentives and fairly low mortgage rates, homebuyers in Dallas continue to meet resistance. Real estate experts have projected that an additional 132,000 home starts are required to lower local prices, The Dallas Morning News reported. However, it is unlikely builders will have the resources needed to develop more homes at a quicker pace, as many struggle with labor shortages.
Currently, an estimated 18 percent of all prospective homebuyers in Dallas are looking for starter homes, according to Housing Wire. Unfortunately, only 6 percent of listings fall into this category. There's a similar discrepancy in the trade-up home market, as 32 percent of all buyers search among these properties which account for only 17 percent of total housing stock.
Houston house hunters find few options
Almost 250 miles south, prospective buyers in Houston are dealing with comparable problems. Like Dallas, the coastal city has experienced a building boom recently but many builders in the area are focusing on high-end properties, the Houston Chronicle reported. Consequently, middle-class and low-income families have been priced out of the market, as construction crews erect pricey homes and flashy high-rises.
Even with these new projects, overall inventory remains low. Since 2015, it has decreased more than 10 percent. This drop has catalyzed a price increases across the board, pushing the median home price above the $240,000 mark. Approximately 17 percent of all searches are related to starter homes, which comprise roughly 6 percent of the total stock. Thirty-three percent of buyers in the area are in the market for trade-up homes and these account for 19 percent of the stock.
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