Homeowners are staying put, and opting not to move. A recent article in the Wall Street Journal notes homeowners in the United States are remaining in their homes typically 13 years, five years longer than they did in 2010, according to a new analysis by real-estate brokerage Redfin. When owners don’t trade up to a larger home for a growing family or downsize when children leave, it plugs up the market for buyers coming behind them.
More homeowners staying put has helped cause housing inventory to dwindle to its lowest level in decades, which has also helped push up prices on homes for sale. Adjusted for population, the inventory of homes for sale is now near the lowest level in 37 years of record-keeping, according to housing-data firm CoreLogic Inc.
Homeowners are staying longer in every one of the 55 metros that Redfin studied. Why? It seems there’s no definitive answer. Some suggest it has to do with the high costs when selling, or the lack of affordability when trying to upsize. Something is broken and nobody seems to know why.
That takes us to Canada, where a similar phenomenon appears to be playing out here. New listings remain stubbornly low in Vancouver & Toronto. Here’s a chart of new listings per 1000 people.
And here’s a chart of the 12 month average of new listings in Greater Vancouver across all property types. Basically new listings are falling which is causing inventory to drop.
Perhaps you need a trigger to force people to sell, like a recession. Or perhaps this is a secular shift in behaviour? Whatever it is, it’s not helping housing affordability.