Expect inventory – but not balanced market conditions – to increase
Barring unexpected complications expect home construction to begin expanding inventory for the next two years. Kingsport is just one example of how construction is being ramped up. The city has 1,500 lots for single-family and condos in some stage of development.
And since mortgage forbearance has not been extended a 10% to 11% increase in inventory is expected later this year. That would be a top-end increase of about 500-600 listings. But neither means balanced market conditions (5 to 6 months of inventory) any time soon. Supply is not expected to exceed demand for at least two years.
While more inventory will relieve upward pressure on prices, it won’t mean a big near-term decline. The market has moved the sweet spot to the $250,000 to $300,000 range. And expensive home sales homes continue skewing price expectations higher.
A conservative estimate is the market won’t be fully balanced until mid-2023 or 2024. So, the demand for rental properties – and increases in rents – is not expected to moderate.