One of the things we have admired about Gary Keller, founder of Keller Williams, was his ability to see and predict the future. Gary does not see himself as smarter than everyone else but rather a student of the industry. He looks at life and business with questions, and it is these questions that bring him and the company clarity. The national housing supply shortage was predicted years ago by Gary, simply by studying the numbers.
Back in 2005 and 2006 we had an over-supply of homes being built. We had a false sense of security about the housing market, and many people knew it. Brett reported in 2005 the SW Florida real estate market was overbuilt. We simply did not have enough demand. We had flippers selling to one another, but not enough end users.
National Housing Supply Shortage
Today we do not have that problem. In fact, it’s the reverse. We have strong demand and not enough inventory. Builders and banks were skeptical after the housing crisis in 2006 and held back. As you can see from the graph, we had deficit home building starting in 2008 and 12 years later we are just now getting back to normal. However, the damage was done and now we have a different crisis of sorts. We have a national housing supply shortage.
Few places is it worse than SW Florida. SW Florida has strong demand from northern states who have suffered from COVID-19 lockdowns and high taxes. People are flocking to Florida in droves. We don’t believe this is going to change. The pandemic has taught us that people really can work from anywhere.
If you could work from anywhere, would you work in a high tax state? Would you work in frigid cold temperatures? Would you work in a big city? The answer for more and more people is no. They would prefer working and playing in Florida. When you hear government talk about travel bans from Florida, they’re not really talking about Covid-19. Transmission rates in Florida are nothing spectacular. This isn’t about new strains either, as the new strains are or will be everywhere by March. This is about protecting tax bases in other states.
Politicians are afraid because high tax states like California, Illinois, New York, and New Jersey have budget shortfalls. They simply have more bills and unfunded liabilities than income and if their top wage earners leave it puts more pressure on the people who are left.
Demand Outpacing Supply
This article is not about politics. It is about math. The simple math tells us more people are coming to Florida and will in the future. The trend started years ago, and 2020 sped things up.
We are going to have to build our way out of this. If you read this article frequently, you’ll know that we talked about builders shutting down or slowing new home sales. They simply cannot keep up. This past week we heard of a builder refunding buyers deposits and raising prices $70,000.
New home construction costs are going up. Builders are raising prices. They must. Resale home prices were rising too, but they were limited because if they got too high buyers would just buy new construction. When new home construction prices rise or slow down, it throws buyers back into resales.
It’s getting rough out there. Realtors say it’s a war zone out there. We are not making light of actual war, but it is a fight. Buyers are in combat with other buyers competing for the home they want. Sellers, this is the best market we’ve seen for you in 30 years+ years.
Would You Sell if We Had a Buyer for Your Home?
If you are thinking of selling, please call Brett or Sande Ellis today 239-310-6500 or visit www.SWFLhomevalues.com for a free estimate of what we could sell your home for fast.
If you are a buyer, the Ellis Team knows where the inventory is. It is limited, but we know how to find it. We feel like a fishing guide where fisher men and women hire us to use our secret fishing hole. We know where the secret fishing holes are, and we can help you hook ‘em. Our fish finder can be found at www.LeeCountyOnline.com It will tell you where the fish are in real time.
Good luck and happy home fishing!
