DataMarkets & Economy

Housing demand isn’t met in most large metros, Trulia says

Report measures housing supply elasticity in 100 largest US metros over past 20 years
  • Trulia report finds that U.S. homebuilders are slow to keep up with the rising home prices, but have otherwise historically kept pace.
  • Las Vegas has the highest rate of housing supply elasticity of 1.17, which means that housing supply has increased slightly more than prices in the last 20 years.
  • California and New York cities have been slow to keep up with the pace of demand over the past 20 years.

Home prices continue to climb as homebuilding stalls in adding enough supply to the stock. But like most things in real estate, whether or not a city can add enough volume to meet the incoming demand depends on location, location, location. In a recent Trulia report, the nation's biggest metros were studied to determine homebuilding trends and local real estate prices over the past 20 years. According to the study, the national demand for housing has grown at a pretty stable pace alongside prices, but as of late, builders aren't supplying homes fast enough to keep up with prices. The gap between new supply and fluctuation of prices is considered "elasticity," the report says, and markets with greater elasticity are able to keep up with the pace of housing prices. One of the biggest hurdles that each market faces is land regulation and zoning. On a national level, long-term housing supply elasticity is at 0.17, which is three points lower than the 30-year average of 0.2. T...