By Lawrence Yun | Forbes
Opinions expressed by Forbes Contributors are their own.
I monitor and look for unique developments in the real estate market.
The inventory of homes for sale continues to shrink. There were 2.02 million homes listed for sale at the end of October, representing only 4.3 months’ supply. A balanced market would be closer to 6-to-7 months’ supply. From a year ago, the raw inventory count was down 4%, which marked nearly two straight years of decline.
This shortage of housing inventory is the principal reason why home prices have been outpacing people’s income growth for the past five consecutive years. From 2011 to 2016, the median home price will have risen by 42% compared to the median household income gain of only 17%. Such disparity hurts affordability and is unsustainable over the long haul.
