Daniel Gross

The housing market’s roaring recovery isn’t all good news, said Daniel Gross. Last year was the best for home sales since 2007, and record low interest rates are helping buyers settle into new homes. So what’s the problem? Simple: There aren’t enough houses. Raw housing inventory is “the lowest it has been since January 2001,” and the median price was 11.5 percent higher in December than a year earlier. We’ve gotten used to slack demand forcing sellers to slash their prices. “But two years of steady improvement—rising sales volume, rising prices, declining foreclosures—has subtly changed the equation.” Now a tighter market is discouraging buyers as attractive, fairly priced homes trigger bidding wars. This problem will persist, since new houses take time and money to build. “It’s not like you can just order up another batch quickly from China when you sense the market turning.” Realtors always like to rush homebuyers into making an offer, arguing that the house might not be there tomorrow. “In recent years, that ancient sales tactic has been easy to dismiss as baloney. Today, it’s likely to be true.”