SEATTLE, Aug. 14, 2018 /PRNewswire/ -- One of the defining
characteristics of today's housing market is the lack of available
inventory, and much of this scarcity can be traced back to the lack
of building following the bubble's burst.
Between 1985 and 2000, there were 3.9 permits issued for
single-family homes per 1,000 residents. Since 2008, that mark
stands at just 1.9 permits per 1,000 people. If that historic rate
had continued over the past decade, there would be about 6.3
million more single-family homes in the housing stock, according to
a Zillow® analysis. It would take about five years of building at
the current pace of 1.3 million homes per year just to add those
"missing" homes.
Inventory has been falling on an annual basis for the past 41
months, although its decline has slowed in recent months. With such
limited inventory, competition for available homes has been
particularly fierce in recent months in the nation's hottest
housing markets, driving up prices and making it more difficult for
new buyers to enter the market. The median home value is higher
than its pre-recession peak in more than half of the nation's
largest markets.
Since 2008, only Houston has
kept up with its pre-bubble building pace, issuing more residential
permits than there would have been at the historic rate. The permit
pace in Las Vegas slowed the most,
falling from 14.4 permits per 1,000 residents prior to the housing
boom to just 3.2 permits for every 1,000 residents over the past 10
years.
"Building activity came to a near-standstill when the housing
market collapsed, and now a decade later, years of underbuilding
have left a gap of millions of homes missing from the American
housing stock," said Zillow Senior Economist Aaron Terrazas. "In nearly every major market
today, single-family homes are being permitted at a lower rate than
they were historically as builders face a number of challenges in
adding new homes, including land and labor costs. What this means
for buyers is a smaller supply of homes on the market, leading to
increased competition and higher home prices. Historically,
population growth has been met with new construction and new
construction was a critical contributor to new inventory. Without a
sustained pickup in permitting and construction activity,
first-time buyers will struggle to gain a foothold on
homeownership."
Another effect of fewer homes being built is that existing homes
are getting older. The median age of homes that sold in 2007 was 24
years. By 2017, that had increased to 37 years, bringing a new set
of challenges around home maintenance as the structures age. In
Indianapolis, the median age of a
sold home increased from 21 years to 41 years, the biggest age
increase among the 35 largest metros.
Metropolitan
Area
|
SFR Permits
Per 1000
Residents
1985-2000
|
SFR Permits
Per 1000
Residents
2008-2018
|
Median
Age of
Sold
Homes
2007
|
Median
Age of
Sold
Homes
2017
|
United
States
|
3.9
|
1.9
|
24
|
37
|
New York,
NY
|
1.5
|
0.5
|
49
|
58
|
Los Angeles-Long
Beach-Anaheim, CA
|
1.5
|
0.5
|
44
|
54
|
Chicago,
IL
|
3.1
|
0.7
|
36
|
47
|
Dallas-Fort Worth,
TX
|
5.1
|
3.4
|
10
|
22
|
Philadelphia,
PA
|
3.2
|
1.0
|
51
|
59
|
Houston,
TX
|
3.6
|
4.9
|
8
|
24
|
Washington,
DC
|
6.1
|
2.0
|
21
|
33
|
Miami-Fort
Lauderdale, FL
|
5.1
|
0.9
|
25
|
36
|
Atlanta,
GA
|
9.9
|
2.6
|
11
|
24
|
Boston, MA
|
2.3
|
0.9
|
50
|
57
|
San Francisco,
CA
|
2.3
|
0.8
|
42
|
53
|
Detroit,
MI
|
3.2
|
1.0
|
55
|
62
|
Riverside,
CA
|
7.9
|
1.5
|
18
|
30
|
Phoenix,
AZ
|
9.2
|
2.9
|
10
|
23
|
Seattle,
WA
|
4.8
|
2.1
|
21
|
35
|
Minneapolis-St Paul,
MN
|
5.7
|
1.7
|
21
|
38
|
San Diego,
CA
|
3.6
|
0.8
|
24
|
37
|
St. Louis,
MO
|
3.8
|
1.6
|
42
|
51
|
Tampa, FL
|
5.4
|
2.5
|
23
|
35
|
Baltimore,
MD
|
4.7
|
1.5
|
41
|
45
|
Denver, CO
|
5.4
|
2.5
|
24
|
34
|
Pittsburgh,
PA
|
2.0
|
1.3
|
55
|
65
|
Portland,
OR
|
5.4
|
2.2
|
23
|
36
|
Charlotte,
NC
|
7.8
|
4.2
|
7
|
21
|
Sacramento,
CA
|
6.8
|
1.8
|
20
|
33
|
San Antonio,
TX
|
3.4
|
2.6
|
8
|
22
|
Orlando,
FL
|
10.1
|
3.8
|
11
|
25
|
Cincinnati,
OH
|
4.4
|
1.5
|
35
|
49
|
Cleveland,
OH
|
2.5
|
1.1
|
53
|
62
|
Kansas City,
MO
|
5.1
|
1.8
|
33
|
43
|
Las Vegas,
NV
|
14.4
|
3.2
|
7
|
18
|
Columbus,
OH
|
4.7
|
1.7
|
31
|
42
|
Indianapolis,
IN
|
5.9
|
2.5
|
21
|
41
|
San Jose,
CA
|
2.0
|
0.8
|
36
|
47
|
Austin, TX
|
6.0
|
5.3
|
6
|
16
|
Zillow
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dedicated to empowering consumers with data, inspiration and
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great real estate professionals. In addition, Zillow operates an
industry-leading economics and analytics bureau led by Zillow
Group's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
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