What’s interesting about today’s market is that we’re fully recovered from the recession, but we still have a supply and demand concern when it comes to housing. Why?
First and foremost, we’re seeing that first-time home buyers are buying less frequently than they historically do. Normally this group makes up about as much as 50% of the home buying market, but right now that’s number is closer to 30%. Much of it is due to jobs and income, and a lot of it is school debt. With many first-time home buyers - typically millennials - they have graduated from high school and college out of a recession, and have a different economic status than the generations before, so housing hasn’t become as important, which affects housing supply.
First-time home buyers aren’t buying as frequently as usual.
When buyers on the front end don’t buy, it has a ripple effect, meaning move-up buyers and next step buyers don’t end up purchasing those homes, because they stay in their homes longer. This will affect days on market; if homes sit on the market longer, offers come in lower.
All of these things make a stew that makes up housing inventory. Additionally, builders stopped building new homes during the recession but have come back to create supply to meet all the demand. We’re seeing a normalization of the marketplace, which is great for us all.
If you’re interested in finding out more tips and trends, or you’re interested in buying or selling a home, my team would love to help you with any questions you may have. Give us a call or send us an email today.
