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A sign is seen outside of a KB Home sales center in Richmond, California. It could take a while before business is back to normal.
Monthly real estate data has been pointing in one clear direction for the past few months: a lack of supply is driving up prices.
At this point, everyone from the California Association of Realtors to the National Association of Realtors to economists and firms that track the Southern California real estate market agree: We don’t have enough houses!
But wait — idn’t we just go through a massive housing bust? Yes, but now demand is surging, driven by low prices and low interest rates. Meanwhile, homebuilders are building again, but at about half the rate they did in the early 2000s.
The California Association of Realtors says there’s barely a three-month supply of homes to sell in the state. Twice that would be normal. But rationalizing the market could take time, with analysts predicting it could take anywhere from a few quarters to a year before the homebuilding business is solid again for firms like L.A.-based KB Home.
In the meantime, buyers and sellers should expect the Southern California housing market to be anything but predictable.