The challenge we currently face is a lack of inventory in the more affordable price ranges (affordable = homes priced below median housing price). New construction cannot keep up with the large numbers of homebuyers coming into the market, and the subsequent demand. Many homebuilders are reporting that they are pre-selling future starts in the more affordable price ranges.

When compared to 2001 some reports indicate that there is a decline in new inventory coming onto the market. However, you must consider that 2001 started the year with an adequate supply of new inventory in all price ranges due to higher interest rates and the after-effects of the dot-com decline the year before. As soon as rates began to lower to historic levels, the more affordable inventory quickly sold. And homebuilders have not been able to keep up with the demand ever since.

We continue to see very strong home sales in the more affordable price ranges and activity is picking up substantially in the middle to upper end markets as well. With this being said, I can say with total confidence that if we had more inventory in the more affordable price ranges we would have even more sales — because if there’s one thing we don’t have a shortage of, it’s buyers.