Ever wondered why, in the face of a sharp inventory shortage, new home construction still lags so far behind other housing indicators?
1) Because, despite a supply shortage, the vacancy rate remains elevated, thanks to a glut of unlisted vacant properties, many of them foreclosures.
The market does not have a housing shortage, just a shortage of for-sale listings.
“Many of those vacant, off-market homes could come onto the market, especially if their owners are just waiting for prices to rise enough to make selling worthwhile,” Kolko wrote in a blog post.
2) Because household formation, which fuels demand, is only half its normal rate.