One of the big portal's chief economists -- Trulia’s -- released study conclusions this week based on the company's "inventory monitor": the shortage of housing for-sale inventory is due to the price gap between low- and mid-level homes and “premium” ones, and the large number of starter homes either bought by investors or underwater vs. mortgages.These conclusions have gone viral, now in many major publications and a lot of local ones.I think these conclusions are mistaken. One at a time.... Is there a shortage of low-end and move-up homes? Low-end and move-up houses are always in greater demand than the top-end. Every responsible Realtor shows clients the “inventory turn” at specific price points -- that is, at current rates of sale, how many months of supply are ava...
- Low-end and move-up houses are always in greater demand than the top-end.
- Young people may struggle to buy because of job instability, or difficulty saving, but price versus payment is not the problem. Construction shortage is.