Ever since the Great Recession, far fewer homeowners have been selling their homes annually, a trend that is not going away.
Lack of Sellers: Fewer homeowners are opting to sell in spite of homes appreciating to record levels.
Millions flock to the Hawaiian Islands to escape the grind of everyday life and bask in the tropical sun and warm waters. After relaxing for hours on the sand and swimming in the aqua blue surf, so many vacationers forget to reapply sunscreen. Upon returning to the hotel room, the inevitable has occurred. Looking in the mirror they confirm they have a lobster red sunburn from head to toe. Nearly everybody has experienced the pain of a deep sunburn. It is hard to sleep, hard to take showers, and hard to go back out in the sunshine again. The pain is a reminder to never forget to reapply sunscreen again.
Similarly, homeowners across the nation watched the housing market take a pounding during the Great Recession as their equity vanished in a blink. Many lost their homes to short sales or foreclosures. Everybody either personally got stung by the correction or knew of somebody who did. As a result, a new trend emerged to avoid a lobster red burn in the future: homeowners stay in their homes a lot longer. There are far fewer homeowners who opt to sell every year. Even with record home values, the trend continues.
From 2000 to 2008, there were an average of 1,347 more homes that came on the market every single month compared to the past 10 years. That is an extra 16,158 sellers every year, 39% more. That has been the storyline for a decade, not enough homes are offered for sale. It is not just an Orange County phenomenon. Nor is it isolated to California. A lack of sellers has been a national issue that has plagued the real estate market and made it very difficult for buyers to isolate a home.