HOLMES ON HOMES So what happens when builders go bust? You’re living through it.. it already happened. Don’t worry – I haven’t lost my sanity and suggesting that our current new construction market is doomed. I’m just trying to grab your attention. Did I get it? Are you listening? This is a continuation of the conversation I’ve had with many of you over the weeks and months.. a continuation of the articles I’ve written about over the last year on our inventory shortage, the boom in demand and where it’s all going. So grab your favorite beverage and sit back and enjoy some fresh new perspective on this topic… here we go! The beginning of this conversation is the current market trends.. super low inventory combined with high demand is making for a bat-shit crazy market. Homes have increased in value at an unsustainable pace. Buyers are fighting for homes in most cases - not all cases as I don’t want to paint too ugly of a picture – but you get it, you can’t miss it. It’s in the news, on tv, you hear it on the radio – crazy housing market, right? The question I always get and the conversation I have most often is - how did we get here and where are we going? The low inventory (and current market chaos) is driven by 2 main factors – builders that went bust and the current crazy high demand. Wait.. what do you mean builders went bust? Yes indeed.. this story starts around 2009. In order to know where you’re going – you need to take a look at where you’ve been. So let’s take a look back on builder inventory over the last 12 years. It’s a distant memory for some and for some current homeowners – they didn’t even own during the last crash. However, it’s still affecting us today. One of the main reasons we have low inventory today is because inventory was not being created at our normal pace for 4
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