Monmouth County Homes – Inventory Is At A 20-Year Low!
Monmouth County Homes – Inventory Is At A 20-Year Low!
A recent survey by Realtor.com has informed the public of this extraordinary fact and they cite as one of the reasons being the reluctance of Baby Boomers to trade from their current homes either up or down.
Over 59% of those individuals that responded to the survey stated that in the next year, they will not be putting their home up for sale.
According to the National Association of Realtors, on the market in June was a 4.3-month supply of homes. What this refers to is the time that it would take, if no new units were added, to run out of homes for sale. This figure is less than the 4.6-months supply recorded one year ago.
Home prices have been driven up by the crunch. Up from one year earlier in May was the S&P CoreLogic Case-Shiller national home price index and this measured an all-time high. Even frothier are other markets such as Dallas at 7.9% and Seattle with 13.3% average home prices.
The chief economist for Realtor.com, Danielle Hale says, “many first-time home buyers have been forced by the housing shortage to consider condos and smaller homes as a means of getting themselves started. The data we have accumulated shows that in the next year we may see more of these homes coming on the market, but whether or not the owners will actually list is going to depend on whether or not they find another home.”
Realtor.com, which is operated by News Corp. and which is an online real estate listing site, surveyed across the U.S. some randomly selected homeowners between July 6 and July 13. Here are some of the findings these 1,054 homeowners revealed:
Not Going Anywhere Are The Baby Boomers
Personally satisfied and comfortable with just where they now live are a large majority of those both near and at retirement age. Eighty-five percent of those belonging to the Baby Boomer generation reported that in the next year, they have no intention of selling. Among Baby Boomers, homeownership is about 33 million properties or 78%. Compared with Millennials, that is nearly twice as high. Historically, older groups do move less frequently than do the younger groups and in this instance, the trend continues on.
There has been a shift however in the market dynamics, because in older age groups there are more people than there have been in previous years. In 2015, 21% of the population was made up of people age 55-74. This compares to 1985 when that figure was 16%.
A 72 year old retired teacher by the name of John Clark considered moving from his Greeley, Colo. three bedroom home to a Phoenix retirement mecca. He then went on to say however, “I’m with the Veterans Administration and I’ve developed many friends here, so why really would I want to relocate. If I did so, I would have to start all over again”.
“Both in the detached suburban home segment and the condo market, boomers hold the key to the homes desperately needed by the market”, Hale said. “But with rising home prices and an economy that is strong, in the short term there is no reason to sell for established homeowners. Although Boomers might be considering downsizing, they do face the same price increases and inventory shortages that are plaguing the Millennials”.
As an example, for both Boomers and others to buy, there are fewer homes. And despite a gradual increase since the real estate crash of the mid 2000s, the number of housing starts still remains 35% below the levels considered to be normal. In addition, 10% of those owning a home still owe more on the mortgage they carry than the current worth of their home.
According to ATTOM Data Solutions, this is down from the 2012 figure of 29%, but it still far exceeds the 5% that is the historical average. This prevents from selling those homeowners that are “underwater”!
In addition, there has been a widening of the gap existing between trade-up homes and premium homes says the Trulia chief economist of real estate research, Ralph McLaughlin, and this prices out those Boomers That have the desire to move up.
Happy With The Home They Have
All of these current facts have to be combined with the other fact that many Boomers are perfectly content with their houses. 72% when asked why they plan to remain stated their family needs are met by their current home. Another 12% cited the need to make improvements in the home and 13% cited financial concerns.
Hale of Realtor.com has pointed out that Boomers are not anxious to move to traditional spots for retirement like Florida and Arizona and are more concerned with keeping friends and family ties close.
Looking at the 35% saying that in the next year they are planning to sell, over half of these are Millennials seeking larger homes or homes with more features. From a year ago, starter home supply in the market is down 17% and houses of medium size are down 10%.
The report goes on to say that “in today’s market, starter homes are the price point most sought after so it may be good news for buyers that many Millennials do have plans to sell”.
To find out more information about selling your home, contact us at info@onestophomebuyersLLC.com
Source Credit: USA Today – Real Estate News