Secret #74 – 6-Months of Inventory of Houses for Sale is a Lot More Than It Used to Be

With the internet and electronic signatures, the mechanics of the home buying process are far faster than during the 1980s real estate boom or during the 2000s real estate boom. That increased speed amplified the increases in demand that came from the lower mortgage rates and the changes in demand caused by COVID.

That increased speed is equivalent, in a way, to having more buyers because it becomes more likely a house will get multiple offers when it first hits the market. 

In addition, when it's so easy to make offers, potential buyers make more offers on more houses before they get discouraged and stop making offers. 

Increased speed means more demand with the same number of buyers!

It appears likely house prices will forever be more sensitive to increases in demand and the real estate market will forever be more prone to booms. Due to today's house-buying technology, whenever there’s an increase in demand (or decrease in supply), prices will increase faster and more than they would have in the 1980s or 2000s given the same increase in demand (or decrease in supply).