Real estate supply and demand!
As an economics major with an MBA in Finance, the basic economic theory of supply and demand tells me that as buyers find less Manhattan real estate inventory to bid on which has effectively pushed prices up, that more sellers should enter the market once again increasing the supply as they attempt to take advantage of the price spikes.
But that is not happening and the question then becomes one of why?
In fact to date in 2013 real estate inventories are actually as far below the 10-year average as they were above that same average in 2009.
Here are some possible explanations.
An article in Curbed New York written by Jonathan Miller explains:
“One of the biggest housing market complaints these days pertains to thelack of inventory, both existing and new development. Many would assume the complaining is only coming from buyers and real estate agents and not from would-be sellers. Of course, for those who are selling it should be a good time since the competition is limited, right?
If inventory is so low, why aren’t sellers coming out of the wood (cast iron, brick, etc.) work to take advantage of the limited competition? A big unsung factor is that many sellers can’t sell (sellers when they sell become buyers, and if they don’t qualify for a trade up they don’t sell—this is more than a third of US mortgage holders)—otherwise we’d see a surge of inventory enter the market this spring.
But we aren’t seeing that…”
Read the rest of the article here.