The real estate market is facing a persistent inventory shortage, not because of strong buyer demand, but because homeowners who locked in low mortgage rates during the pandemic are unwilling to sell, according to Staten Island broker associate Kevin Borgersen. This supply constraint, he argues, is hindering transactions and reshaping how the market functions.
Borgersen, a broker associate and company trainer at Red Door Realty Group in Staten Island, says most homeowners have little financial incentive to move. “For them to sell that and go buy something else, the inventory, the interest rate is going to be much higher,” Borgersen explains. Homeowners with mortgages below 4% are reluctant to trade up or relocate when new loans would cost them significantly more each month.
This marks a sharp departure from the 2020–2022 period, when low interest rates and rising prices sparked a selling boom. “When the interest rates were down, and house prices skyrocketed, anybody who was thinking about selling a house decided at that point to sell their house,” Borgersen says. That surge cleared out most discretionary sellers—those who wanted to move but didn’t have to.
The Distressed Seller Market
Now, Borgersen sees a market dominated by sellers who have no choice but to list. “Homeowners are hesitant to sell, and the only ones that I see that seem to be selling are ones that have to,” he says, citing financial hardship, divorce, or life changes like retirement as the main reasons.
This creates an unusual situation in which both supply and demand are low, yet prices remain stable because inventory is even more constrained than buyer activity. Staten Island properties currently average 45–60 days on market, a pace that suggests neither intense competitive bidding nor an obvious advantage for buyers. “Supply is down, and demand is down; they’re still balanced, and it’s still leaning more as a seller’s market,” Borgersen observes.
Traditional market logic suggests that falling demand should benefit buyers, but Borgersen notes that when supply contracts even faster, sellers retain pricing power. Fewer homes on the market mean buyers have limited choices, keeping prices from falling even as sales volumes drop.
Why the Lock-In Effect Matters
Borgersen believes the mortgage rate lock-in is now a structural force in the market, not a short-term fluctuation. The result is lower market liquidity, slower neighborhood turnover, and a lack of variety in available properties. When only distressed or life-stage-driven sellers are listing, buyers no longer see the range of options that typically defines a healthy market.
“This shortage is also changing buyer behavior. Buyers are becoming more selective. They are willing to wait on better deals even though the deals aren’t out there,” Borgersen says. Many buyers are holding out, hoping for a price drop or an increase in inventory that shows no sign of materializing in the near term.
Borgersen expects this lock-in effect to last until either interest rates fall significantly or enough time has passed that more homeowners are compelled to move for personal reasons, regardless of how much higher their next mortgage payment will be.
Industry Response and Adaptation
Red Door Realty Group, where Borgersen trains new agents, is responding by emphasizing education about these persistent inventory constraints. Borgersen was recently elected to the Staten Island Board of Realtors, where he may help shape the board’s local industry responses to the ongoing shortage.
He says real estate professionals must adjust their strategies for both sellers and buyers. Instead of waiting for a return to pre-pandemic “normal,” agents may need to develop new approaches to finding listings and managing buyer expectations. Recruiting sellers will require recognizing that most are not motivated by market conditions but by necessity.
Whether the industry adopts solutions such as assumable mortgages, rate buydowns, or other financing alternatives will likely determine how quickly transaction volumes and inventory levels recover. For now, the market remains defined by a shortage of willing sellers and a growing acceptance that the old rules of supply and demand no longer apply.