By Diana Olick | CNBC
Ask anyone house hunting this spring, and they’ll tell you there are far too few homes for sale. But, really, it’s the price tags of the homes for sale that are the issue.
It seems like a very simple fix. Not enough homes? Build more. Builders are doing that, but they’re not building the right kind of homes.
Builders say they are now targeting the millennial buyer — launching new, slightly lower-priced brands and stripping down the models — but clearly, it’s not enough. The supply of existing homes for sale is near a record low, but the supply of newly built homes for sale just jumped dramatically, returning to its 30-year average. The chasm between the two is all about prices.
“It is true that the lower-priced segment of the market has been largely-ignored over the last decade; the reason is simple: those seeking homes in the lower-priced segment of the market fell at a disproportionate rate to mid- and upper-priced buyers. Homebuilders followed demand. Builders are now rapidly expanding lower-priced offerings, creating new brands that target starter-buyers. D.R. Horton, Richmond American, and Ashton Woods have rolled-out brands in the past 24 months targeting these buyers, and we anticipate more soon.”
~ Jim Belfiore, real estate consultant
