What do you mean by crisis?
I mean this
There’s talk of bidding wars and price hikes and building material shortages all over the place.
People who are trying to buy houses are facing multiple tries of making an offer and losing out because of multiple other bidders. Houses being under contract in hours. People having to wait to get their house built.
https://www.google.com/search?q=housing+crisis
But if you are not aware of a housing crisis, then maybe you won’t have anything to say about what is causing it.
This has been happening for at least a year in the city where my kids reside. In fact, when they purchased their first home 3 years ago, they put offers on several properties before their bid won. They paid more for their home which is about 1/3 the size of the house we own in the small town where we live. Of course, there are better job opportunities, better access to the things young people value: good restaurants and bars and music venues, etc. This past year has been worse. Inventory is very low even where I live.
We had renovations scheduled prior to the pandemic and carried them out during the pandemic. Some things (mostly plumbing supplies) took much longer than usual because so much was coming--or rather, manufactured in China but not coming to the US because of the pandemic. I ordered some bathroom accessories such as towel bars, etc. from a major home decore company that usually ships within days that took months. I am glad that I didn't need to have new kitchen appliances because my understanding is that these are coming at a high premium and involve months long delays after ordering. In fact, I am crossing my fingers that my washer and dryer hold out for another year or two, until things settle down. I am not certain why, except that I am guessing that much is manufactured in China or elsewhere overseas.
There has been an ongoing shortage of building materials for a couple of years, particularly in terms of wood of all kinds/grades. Part of this is because old growth wood has long since been harvested and replanting not only lags, but is of lesser quality as tree farms are treated with chemicals that encourage rapid growth at the expense of quality, hardness, density of wood produced. So, if you wish to buy a dining room table, for instance, from say, Ethan Allen, you will note that most of their pieces are made of woods you likely have never heard of---grown in far away places, probably with less stringent environmental laws in place.
A few other things have come into play, I think:
1. Mortgage rates are extremely low. This has the net effect of increasing prices for houses, as mortgage lenders qualify buyers based on what total monthly mortgage payment a buyer can afford. If they think that you can afford $1000/.month, then when mortgage rates are lower, you can qualify for a more expensive house. If rates are higher, you will qualify for a lower priced home. Since this applies across the market, it has the net affect of either driving prices up or lowering prices.
2. All of those home improvement shows are great and addicting and yes, indeed, they do spur home renovations and redecorating which increases demand for all things home related.
3. The pandemic forced most people to spend more time in their homes...where they began to notice the things they didn't like or wanted to change or improve. Paint stores were running out of paint nationwide because everyone was home painting their house which suddenly looked dingy. Home improvements/renovations boomed, as did the building of new businesses and homes. My projects were competing for plumbers, electricians, carpenters, tile people, drywall people, etc. with not only other home improvers but also with large building projects going on in my area. It was wild. And interesting. I got the inside scoop about when a much anticipated restaurant was likely to actually open rather than what it was saying in public because my plumber and my tile guy were both working on that project as well. I don't think that my town is that different than any other town, as I hear from friends how difficult it is to find a plumber or electrician, etc. Partially, this is because not enough young people go into the trades but this shortage has been made much more apparent by the current building/reno boom.
Also because people have been spending more time in their homes and more people are planning to work from home, they are contemplating whether their current home still meets their needs--so they are going shopping for a home that does. And because mortgage rates are lower, that nicer, larger home in a better neighborhood may have become attainable....
