Yahoo Finance Half Of America's Housing Inventory Is Concentrated In One Region Of The Country
Horace Greeley is famous for his advice to "go West," but Americans in search of affordable housing are increasingly turning south to get their piece of the rock. This massive migration to the South can be explained in part by a Realtor. Com study, that shows nearly 57% of America’s available housing inventory is located there. The study also shows a regionwide 19.7% increase in available inventory in comparison to one year ago.
That is in stark contrast to the Northeast, which only added 2.5% more inventory, and the West, which added 7.5%. The lack of inventory is one of the main factors driving an affordability crisis that is effectively shutting out first-time buyers in the West and Northeast. Median home prices in cities like New York, Los Angeles, and San Francisco have been spiking for years and have reached a point where it's prohibitively expensive to buy anything.
Even starter homes and fixer-uppers in prime West Coast or Northeast markets are selling in the high six and low seven figures. That alone is threatening to price an entire generation of homebuyers out of those markets, but when today's interest rates are factored into the equation, it's no surprise why so many Americans are tapping out and moving down South.
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Not only is there an abundance of new inventory there, but affordable new inventory is abundant. The Realtor.com study also showed that homes between $250,000 and $300,000 are being added to the South's available inventory more quickly than homes in any other price range. News like that is music to the ears of exasperated West Coasters and Northeasterners, and they are voting with their wallets.
Although the South is outpacing other regions of the country in terms of new inventory, developers are doing much of their building in the central and Northern parts of Florida. Tampa and Orlando are leading the way with year-on-year inventory increases of 69% and 64% while inventory is up 59% in Jacksonville. That's led to an increase in for-sale listings, which also serve as a check on prices.
Speaking to the Daily Mail, about the inventory boost, Realtor.com's chief economist Danielle Hale said, "The number of homes actively for sale was notably higher compared with last year. ‘Sellers continued to list homes at a greater rate than last year. This has led to a promising increase in more affordable homes for sale, especially in the South." That is all encouraging news, but it doesn't mean the Florida real estate market is perfect.
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Indeed, there is currently an abundance of affordable housing in Florida, but unfortunately, the opposite is true when it comes to home insurance. Florida is in the midst of a full-blown home insurance crisis and Sunshine State homeowners are currently paying the highest premiums in the country. The high rates are due in part to the fact that all of Florida's major cities are at major risk of damage from flooding and hurricanes.
The cost of covering hurricane-related claims and litigating with homeowners after major weather events, has driven many insurance companies to stop writing policies in Florida altogether. That has created a situation where Florida's state-owned insurance company is the state's largest home insurer. The private insurance companies that remain are raising premiums and deductibles to such an extent that some Floridians are beginning to exit the state. The condominium market is in particularly dire straits.
With that said, the South is much bigger than Florida and plenty of other Southern states have ample inventory at low prices. Georgia, Alabama, and Tennessee are also experiencing major population growth. So, if you're looking for an affordable house or a market with upside to make real estate investments, the South should be at the top of your list of potential targets.
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This article Half Of America's Housing Inventory Is Concentrated In One Region Of The Country originally appeared on Benzinga.com
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