â€śIn Florida, we have been experiencing very tight inventory and in some markets less than three monthâ€™s supply,â€ť said Rei L. Mesa, president and CEO of Prudential Florida Realty. â€śThe lack of inventory and positive consumer confidence is driving multiple offers on the available resale inventory. The residential rental markets are at near record low vacancies with rental rates increasing. Approximately 30-40 percent are all cash deals
Across the country in California’s Bay Area, Ed Krafchow, chairman of the board for Better Homes and Gardens Real Estate Mason-McDuffie, tells a similar story.
“The San Francisco City market is on fire,â€ť said Krafchow. â€śWe have multiple offers everywhere, from the lowest to the highest end of the business, and agents are simply in the trenches working really hard to get listings because there is so much activity.”
In a May 10 interview on Fox Business News with Lou Dobbs, Richard Smith, chairman and CEO of Realogy Holdings Corp., commented on the inventory issue: â€śWe werenâ€™t bullish in the first and second quarters last year but we were in the third and fourth quarters principally because we saw sustainable price increases. So demand is simply outstripping supply right now and price is reacting to that.â€ť
He continued, â€śInventory is up about 9 percent since January so itâ€™s doing what it should be doing. Builders are building so thatâ€™s adding new inventory. Underwater equity homes now are suddenly no longer underwater in their equity â€“ or at least a high percentage of them. Theyâ€™re coming back into the market as new inventory and just the seasonal swing of business is coming back into the market as inventory. So inventory will correct. Thereâ€™s more than enough demand to meet that inventory need and price is reacting to that.â€ť