The housing market will get even tighter over the
course of 2018. More folks are eager to buy, but the supply of homes for sale
just isn’t big enough. Competition for listings figures to be fierce. But signs
of relief are starting to appear. The market is still plagued by too few homes
for sale…the legacy of the construction bust that followed the bursting of the
bubble a decade ago. Builders would like to make up for lost time, now that the
economy is strong and demand is back. They just can’t. Land is scarce. Skilled
labor is even scarcer. Costs of building materials are up. And fewer homeowners
are inclined to sell when they know finding a new place could be tough. So
inventories of homes for sale will shrink from their already paltry levels…bad
news for buyers. The tightest markets are in the West: Several Calif. cities.
Seattle. Portland, Ore. Many of them make new construction very difficult,
which discourages badly needed supply increases. Close behind: Reno, Nev.
Boise, Idaho. Utah. There are fewer restrictions on building in such areas. But
people are moving in so fast that builders can’t keep up. Ariz. picked up
100,000 new residents in a single year, for instance…most of them in Phoenix.
Such shifts will keep demand strong for years. Many
Southern markets will stay hot or heat up further: Dallas, Atlanta. Nashville and
Chattanooga, Tenn. Charlotte, Raleigh and Durham, N.C., and much of Fla. The
good news for buyers: New-home construction is gradually revving up to meet the
demand. Issuance of building permits for single-family homes has doubled
since 2011, though construction is still nowhere near high enough for today’s
market. And many builders are switching to starter homes, which are sorely
lacking. For years, builders focused on high-end luxury homes, which promised
better profits. Now there are plenty of big houses and far too few small homes
for younger buyers. Mortgage rates are headed higher. But lenders will offer
other concessions to cash in on rising demand. In particular, they’ll keep
easing their credit standards so that buyers with weaker credit scores will
have a better shot at securing a loan
