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Construction is everywhere. Why is there a housing shortage?

Posted: 4:46 PM, Oct 25, 2019
Updated: 2019-10-25 21:01:32-04
Exterior of house, Arizona

Homeownership; it's part of the American dream.

But some are finding it's more of a fantasy right now. Homebuyers can't find what they're looking for, or can't afford what they're seeing.

"We are probably at about 46-percent below what our normal inventory should be," said local real estate analyst Tina Tamboer with The Cromford Report.

Tamboer said there's no shortage of demand in Phoenix.

Nicely updated homes priced under $400,000 may have multiple offers because supply is not keeping up.

"When we get over the $500,000 mark, the market is actually quite balanced, and there is plenty of supply," she said.

Though it seems new neighborhoods are popping up all around us, Tamboer said construction is not where it was pre-recession, so the selection is not there.

"The builders did not build for three or four years because of the recession, so they're catching up," Tamboer said. "They need more help because there's also a labor shortage."

Mike Sullivan works for Take Charge America, a credit counseling agency. He said they talk to dozens each week who would like to buy a home, but can't. They're carrying loads of student loan debt. Rising home prices are not getting them the keys any faster.

"There's no real practical way to refinance it and save money without turning it into secured debt," Sullivan said. "We tell people to accelerate those payments and get it paid off as quickly as you can."

Tamboer expects home values in the Phoenix-area will continue on its upward trajectory into 2020. Even when the values eventually stop climbing, she said she doesn't expect them to drop drastically; instead, she expects them to level off or decrease slightly.

"If you can only afford a property in the low $200,000s or even under $200,000, then you need to get into a property while they're still even available," she said. "That type of inventory is going away very quickly."