Missouri Realtors’ Statistics showed almost a $10,000 increase in the average residential property sales price from March of 2021 to April 2021.
John Mallett, Founder and President of MainStreet Mortgage, believes that with roughly seven million houses needing to be built to meet equilibrium, the circumstances compared to the housing market crash of 2008 are different.
“The last housing crash that we had was based on loans that were made to people who couldn’t afford to make the payments. It was like giving someone a small nuclear bomb,” said Mallett. “Right now what’s happening is that people are getting homes and they actually have to qualify. I don’t really think that we’re in a bubble. I think we’re in a state where prices are definitely high because demand is so great.”
Mallett went on to say that when the prices of homes begin to outstretch people’s ability to qualify, the market will begin to draw back on its own.
As the housing shortage sits where it does and the equilibrium seems long out of reach at the moment, there’s one underlying factor that Mallet believes could get the ball rolling once again.
“A lot of people, because of the pandemic, they’re not quite sure what their job stability is right now. Even though we’re coming back and unemployment looks good, it’s going down and things are getting back to normal, they still want to make sure that their jobs are solid. I think once they start moving again and putting their houses up for sale, I think we’ll get more inventory.” said Mallett.
Mallett says that the average time on market for a home is 1.7 months while at equilibrium where the supply of houses meets the demand for them, that average time on the market would be six months.
The good news for Missouri homebuyers and those prospectively looking to buy homes in the state of Missouri, the state currently sits at a 1.02 affordability score according to the National Association of REALTORS which is above the average affordability score for the entire United States at 0.81.