By: Guest Author, Virginia REALTORS® Chief Economist, Lisa Sturtevant, PhD
Lack of housing inventory drives up home prices faster than if there was a sufficient supply of housing. Although new home construction has picked up in recent years, in some places, it is still not enough to accommodate the increased housing demand.
The National Association of Realtors® tracks data on permits for new housing construction. Historically, a healthy regional housing market has one new housing permit issued for every two new jobs added. That is not the case in every region in Virginia.
In the Richmond metro area, over the past three years, there has been about one new single-family home permit issued for every two new jobs. The situation is similar in the Hampton Roads region.
However, in the Charlottesville and Northern Virginia regions, there has not been sufficient new housing built to accommodate new job growth. In Charlottesville, there has only been one new home built for every 5 new jobs. In Northern Virginia, the ratio is at about 1 to 4.
Check out the interactive Housing Shortage Tracker at http://economistsoutlook.blogs.realtor.org/2018/08/13/improving-housing-supply-conditions/ to provide agents with tools to help them understand trends in new construction in your market.
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