Across the country we have seen a gradual decrease of inventory in the housing market. Both small and large urban areas are seeing an almost 50% drop in inventory levels in comparison to their long-term averages. While it can be said that the real estate market is never really balanced, this decline in inventory is an obvious trend that has begun to shift the way business is conducted. Orcas Island carries its own unique market and inventory, yet such large national trends will inevitably affect both buyers and sellers alike. Here is a market statistics from Windermere Chief Economist Matthew Gardner, to give you an idea of what exactly is going on in the housing market:
So what exactly does this decline mean for the market? Gardner finds that this decrease in inventory and lack of home supply has created an influx of new home building across the nation; a trend we are seeing more and more of in the San Juan Islands, given the lack of supply and increase in new residents. Specifically within single-family homes, historically new construction only takes up around 10% of active listings in a given time period: today, new construction makes up around 30% of the market, an almost 20% increase in the last few months. And while mortgage and interest rates are constantly increasing, Gardner finds that new construction is finding its mark through rate incentives such as mortgage rate buydowns.
So what exactly does this mean for both national and local markets? New home construction will most likely continue to grow until 2024, and as the market becomes more balanced rate incentives will no longer be offered and we will see balance returned to both new and old construction. The trend of low inventory will most likely continue for the foreseeable future, especially in the San Juan Islands, with first-time home buyers finding the most challenge in price increases.
Despite the constant fickle nature of the real estate market, buyers and sellers are still able to find success in their transactions with the right Brokers. Knowledge of the future directions, current trends, and local market conditions are crucial to the success of any transaction. For more insight into our local Orcas Island market, check out our Market Reports page on our website, or call us at (360) 376 - 8000 to speak with one of our knowledgeable brokers.
Gardner, Matthew. “How Low Inventory Is Affecting the Housing Market.” Windermere Real Estate, 25 Sept. 2023, www.windermere.com/blog/how-low-inventory-is-affecting-the-housing-market.