Editorial: Home prices up, inventory down
Share this post:
People love to see a great house.
HGTV is popular for a reason. People want to see what other people’s houses look like, and what their houses could look like, and whether they should think about buying another house or remodeling the house they already have.
That old adage is right. Buy real estate. They aren’t making any more.
Well, it’s half right. Volcanos in the South Pacific notwithstanding, land isn’t being made but homes can be ripped down and put back up, real estate can be subdivided and turned from vast tracts into smaller plots and when all else fails, build up.
And the Greater Pittsburgh area shows that people are interested in whatever real estate is on the market.
In 2019, the number of sales were up and so were the prices. The average home price topped $200,000 for the first time. It’s a seller’s market with high demand and hungry buyers, with available properties being the only thing that fell.
All of that can be good news about the economy. It means people are confident and it means they have the money (or the credit) to make purchases that let them look to the future.
But if we are really looking the future, we should be careful, too.
Multiple real estate experts — from sites that should be celebrating the high prices, such as Zillow, Redfin and Realtor.com — are warning about that low inventory and what it means. The dropping inventory can cause price spikes that lead to rent increases and other ripples in the economy.
The financial crisis of 2008 isn’t far enough away for us to forget how it started. A bursting housing bubble was the first domino to fall, and that’s something everyone should keep in mind when planning a purchase.
Not because buying a house is a bad thing. It’s a great thing. It’s not just personally fun. It has a powerful positive impact on the economy.
But it needs to be done with open eyes and without rose-colored glasses.