Home builders are deliberately delaying the sale of real estate to increase the price. These investors are intensifying the real estate crisis , which will lead to the youngest having even less chance of accessing a home.
At a time when supply does not meet demand, and prices are reaching record levels, these builders are holding back the sale of real estate until they can build at a rate that matches the high demand currently registered. as The Wall Street Journal reports .
The pandemic has affected the pace of construction
Based on this information, these companies are denying the purchase to people who want to buy a house, even if they can build it . This is because they have not yet taken care of the construction of the houses that have already been sold.
This slowdown in production derives from the stoppage of activity during the most restrictive stage of the pandemic and due to the high manufacturing costs that are occurring at the moment.
James Brickman, CEO of Green Brick Partners, for example, during the presentation of results for the last quarter, stated that the company was “measuring” sales to adjust to the levels of demand and the current construction pace and, thus, take advantage of the high house prices.
“We have intentionally delayed home sales because we know there will be demand. There really aren’t many options for home buyers ,” Brickman said.
As Daryl Fairweather, Redfin’s chief economist, explained to Insider , these companies are doing everything they can to increase the pace of construction and thus take advantage of a “hot” market .
However, the shortage of wood, skilled labor and logistical problems, which affect the electrical appliances that will be included in the house, are slowing down this rate of production .
Young people cannot afford to buy houses
According to Insider , this second crisis that millennials are experiencing, added to the influence of teleworking, have fueled the demand for housing until it has resulted in an inventory crisis . Twenty times fewer homes have been built over the past decade than the trend since the 1960s.
On the other hand, despite the fact that the increase in prices that has occurred in recent years has been really remarkable, during the last year they have skyrocketed. In fact, the median sales price of a home in the US hit record highs in March at $ 353,000, according to Redfin. However, the average price reached $ 386,888 in June, demonstrating the excessive growth of this product.
The problem becomes more serious when it is taken into account that prices increased 29% in June compared to the same month of the previous year. However, home sales fell 19%, which shows this trend being carried out by builders.