The U.S. needs about 3 million more homes to catch up with where inventories need to be to meet demand. Needless to say, given the current environment, it will take years to catch up. With many home builders reporting that supply chain constraints are the worst that they have ever seen, we can expect this problem to persist for quite some time. In addition to the time delays being created for home building, these supply chain constraints are also adding additional costs to many projects.
Although much of the supply chain issues are due to pandemic-related shortages, the backlog in home building started before the pandemic. In fact, many point to the housing collapse in 2008 as the beginning of these challenges. With the housing market being decimated during that time, much of the construction workforce left the industry entirely and began different careers. Several years later when Americans began buying homes at a more normal pace, there was a shortage of labor. This shortage of labor lasted for approximately the next decade or so. At that point, the pandemic began and presented even more significant challenges.
The perfect storm
As if the supply chain and labor shortages were not enough for the home building industry, the past decade has also seen the largest demographic of home buyers entering the market. Affectionately known as millennials, this demographic represents the largest pool of home buyers that is now raising or starting their young families and are looking to buy homes. Needless to say, this spike in demand has created even more challenges for a market that was already significantly behind schedule.
Unfortunately, supply chain constraints, labor shortages, and increased buyer demand has been the narrative in the housing market for some time now. Needless to say, these factors are driving up home prices at record levels. Although this will continue to present challenges for home buyers, current homeowners should feel confident that their home values should stay well protected for the foreseeable future. In South Florida particularly, we expect the demand to remain strong as more Americans decide to relocate to The Sunshine State!
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!