The Housing Shortage is Worst in These Cities

Written by Ashley Sutphin Posted On Wednesday, 02 November 2022 00:00

Right now is one of the least affordable times to buy a home in at least three decades, with high home costs and rising interest rates. Homeowners often find they have to stay in their current homes, and would-be buyers are either priced out or realizing they have to lower their expectations significantly.

Also fueling the problem for homebuyers is the fact that there’s a housing shortage in most parts of the country, and inventory is minimal.

The housing shortage is worse in some cities, including the following.

San Jose, CA

San Jose is part of Silicon Valley—it’s often described as the heart of the area. As a result, San Jose is one of the country’s wealthiest cities, and it’s home to companies like Apple and Google. More than a million people are living in the area, but 20% fewer homes were listed this year compared to last.

San Jose saw the most significant drop in housing supply from the previous year of any other major U.S. metro.

Washington, D.C.

Washington’s new listing rate went down 15.8% since last year. The population is around 657,000 in the nation’s capital, and residents compete for fewer housing options.

San Francisco, CA

In San Francisco, while many people are moving out of the expensive city, it’s still facing a housing shortage. The net migration over the past year was -25,061, but home prices went up 6% during that same time.

Among other metros in the country, San Francisco is one of the top five to see the largest decrease in home sales over the last year but still, inventory is incredibly low.

Boston, MA

There is also negative net migration in Boston, but new listing rates have gone down 5%. Boston has continuously increasing home prices, making it challenging for people to stay.

Miami, FL

Miami is facing one of the country's biggest housing shortages and decreases in home sales.

In one study conducted by Florida International University, almost 1/3 of homeowners in the Greater Miami area spend more than 35% of their monthly income on housing. Florida is also second in the rankings of the most expensive states for home maintenance, so it’s not an easy place to own a home.

Boulder, CO

Boulder is a favorite for people who love the outdoors, and it’s often ranked as one of the best places to live nationwide, with a high quality of life and a thriving economy. Prices for homes, however, have gone up 5% just in the last year alone, and it’s one of the country's most expensive places to live as a result. The home inventory is low, and it’s a competitive market.

The Reasons for the Housing Shortage

Rising home costs are part of the reason the U.S. is dealing with a housing shortage, but there are other reasons. Some include the pandemic’s effects on the economy and the ongoing building materials shortages.

The demands for construction only increased during the pandemic, and yet cities around the country were dealing with back orders, slowdowns for items needed to build new homes, and a labor shortage. Even when builders can get the materials they need, they’re significantly more expensive.

What’s available to would-be buyers isn’t affordable due to all these pressures.

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