Aspiring home owners likely notice a lot of “red dots” on Zillow.com and other online home listings. But the high demand for the most desirable Pinellas County real estate contributes to the current housing supply crunch. According to an article by usatoday.com, national housing inventory is below a healthy 6-month level. The supply of homes in Pinellas County is low compared to the demand due to several factors.

A shortage of construction workers

Housing experts point out the California wildfires and recent hurricanes worsened the shortage of workers as people working in Pinellas County get diverted to Texas, California and even Puerto Rico. More than 130,000 homes and businesses in Houston experienced damage while the California fires already devastated more than 7,000 structures.

A lot of happy investors

Real estate investors continue to use residential homes as rental homes because of the high demand and high rental prices in Pinellas. Although a growing number of people use homes for Airbnb, some home owner associations in Pinellas County actually forbid residents to use their homes as vacation rentals or short-term rentals. Still, most real estate investors do not list their rental homes because it’s too profitable to keep their tenants happy.

Financial experts suggest other factors that contribute to the supply and demand problem for first-time homebuyers and others include the fear of hefty capital gain taxes on luxury homes. Married couples do not pay capital gains on the first $500,000. With home prices rising quickly, some home owners don’t want to sell and risk a hefty tax bill. But with the Federal Reserve promising increased borrowing costs, it’s more important than ever to complete real estate transactions. Just a three quarters-point increase in mortgage rates translates into an additional $165 a month for a $400,000 mortgage, according to usatoday.com. Although finding a great home within budget feels like a daunting task, it’s better to buy when rates are low.

At International Title Partners, we understand Pinellas County home buyers and wells want to move quickly on a real estate transaction. For more information on title insurance policies and trends in Pinellas County real estate, please contact us.