With the downturn in the market, it may sound impossible, but signs are pointing towards an impending housing shortage. The National Association of Realtors found that since 2008, 550,000 new homes have been constructed each year. At the moment, our population is growing by approximately 1.5 million each year. That means homes are not being built at pace to keep up with the inflation.
In Las Vegas, new home builds came to a screeching halt when the local housing market crashed. Lots sat leveled with no activity. Permits were pulled and paid for to build thousands of homes, but the land sat vacant. New builds fell out almost every day as buyers backed out and inventory homes were plentiful. Since that time, the inventory homes have been absorbed into the market and last year, locals started seeing new homes constructed once again.
So what does that mean for the American dream of homeownership? For homeowners, it’s good news as home equity will begin to rise once the housing shortage takes effect. Many Las Vegas owners may once again be right side up in their homes instead of upside down. Rent prices will likely follow suit and increase as well. For homebuyers, it could mean facing multiple offers as competition is increased to purchase a home. It could also mean having to pay more for a home than a few years prior.
As for how long it will take to get to that point, it’s hard to say. At the moment, builders are just starting to put out new product, which means it could take years and years to catch up to population growth. Also, currently there are plenty of homes on the market, but Las Vegas is seeing a gradual decrease in the number of homes available and eventually, it will no longer be the buyer’s market it has been in recent years.