First-time buyers and high-end-home sellers should brace for a difficult year ahead
The rising number of listings for luxury properties across the U.S. is at odds with the growing demand for homes in the low- and mid-priced ranges, real estate information firm Trulia said in a recent study.
The survey found that approximately 27% of searches in the fourth quarter were for starter properties, while only 21% of existing listings were for that housing type. On the other hand, 44% of online searches in the same time frame were for high-end offerings, but fully 55% of listings were for homes in that price range.
These developments might lead to an especially difficult year for both first-time buyers and high-end sellers.
“The big, high-level takeaway is that most Americans are looking for a starter or trade-up home but there are a ton of premium homes on the market,” Trulia housing analyst Felipe Chacon told The Wall Street Journal.
Improving economic fundamentals might also presage an increase in the number of first-time buyers, who nevertheless might not be able to afford the more expensive properties available.
“It’s squeezing the bottom end of the market, and that makes for a more competitive process and a less favorable market for premium home sellers,” Chacon said.
The National Association of Realtors said that while overall supply numbers have remained relatively steady, the dearth of affordable homes, along with climbing mortgage rates, led to a 2.8% month-over-month decline in housing sales across the U.S. in December.
