IT'S ECONOMICS 101 - THE LAW OF SUPPLY AND DEMAND

The economics behind buying and selling a home today is fundamental.  Its roots are deep in the Law of Supply and Demand. Today's housing market reflects that principle as there are more buyers than sellers creating higher prices for houses. 

Sellers are seeking top dollar for their houses, while buyers are searching for the best buy at a modest and affordable price. 

If you can believe it, there has been an upside to the COVID-19 pandemic - people have found ways to work from their homes.  As a result, many people are shifting their search pattern towards the suburbs where home prices as more conducive to buyers.  Why pay for the privilege of living in expensive metropolitan areas when there are larger and more affordable homes in the outlying areas?

Another significant reason for higher home prices is the inability of new home builders to meet the demand for modestly priced starter homes.  Since the housing crisis of the early 2000's home starts have taken been slow and have left a void in the housing market.  The recent surge in new housing projects is an attempt to play "catch up".

With the housing market pendulum swung to support a seller's market, the return of the American economy and higher employment will create the force necessary to bring the pendulum back towards a more a balanced housing market.  At which time, prices will begin drop with more homes emerging on the market bringing new buyers into the marketplace.