Most People Would Skip Right Over And Not See This
Most people would skim right over this information in the recently released 2017 Buyer and Seller profiles.
I thought it was important to share with you.
The National Association of Realtors reports in their latest research, three long-time trends that are headed in new directions.
These changes are important because they affect the market locally as well as the national level. They are changes from long-held norms because they are driven by the current economy, lifestyle, and market.
I think it is important to understand the macro forces in real estate to maximize your investment and enjoyment in your property.
Otherwise, things might not turn out as planned.
The first deviation from a long-term norm was the most concerning to me. The share of the market for first-time homebuyers fell to a new low of 34%, from last year’s 35%. The long-term average for the market is 40%.
We’ve all heard the the latest generation is now buying homes, however, it just not near the pace we’ve come accustomed too. And there is not one universal reason why.
Some of it is based on economics. Higher prices and student debt have helped to postpone purchases. For others, it’s changes in lifestyle.
Current buyers report that the most difficult part of the process was finding the right home to purchase. This may be another force that is driving the participation rate down for first-timers.
Second, would be the length of stay in a home. The long-term average is seven years between the purchase and sale of a home. Currently, that number is 10 years.
This may be another reason why first-timers are not a higher percentage of the market. Re-sale homes sell for less than a comparable new home in the same area. And many first-time buyers are price sensitive.
This delay in selling adds to the tight market conditions and lack of inventory. For some areas, the only choices are to pay more than they feel comfortable or sit on the sidelines.
In order to move, sellers need confidence that they will be able to afford and find the next home for their family.
Third, is the change in homes that are: for sale by owner [FSBO]. The percentage of homes sold by their owners maintained the record low of 8% for the third straight year. The long-term average is closer to 13%.
This number is somewhat driven by the market conditions and tends to peak in tough economic times. However, the trend has been diving for the last seven years.
The ever-increasing difficulty in the real estate transaction also plays a part. Seller report that they need help with marketing, pricing, and timing to gain the competitive advantage that only an expert can provide.
Here’s one more stat to remember.
The average for sale by owner sold for $185,000 while the average agent-assisted sale closed for $240,000.
If you want info on the market in your area, let us send you a market analysis custom designed for your home.
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(This works for almost any property in the U.S.)
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