{"id":3115,"date":"2017-09-10T19:35:41","date_gmt":"2017-09-10T23:35:41","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=3115"},"modified":"2021-11-23T17:14:29","modified_gmt":"2021-11-23T22:14:29","slug":"move-up-home-buyers-still-absent","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2017\/09\/10\/move-up-home-buyers-still-absent\/","title":{"rendered":"Move-up home buyers still absent"},"content":{"rendered":"
\"move-up<\/a>
Home sale prices July 2017 (Infographic from NAR.Realtor)<\/figcaption><\/figure>\n

Could it be that the housing market is still recovering<\/a><\/em> from the great recession?\u00a0 Maybe, considering that the housing market has not fully returned to a stable cycle.\u00a0 Consider the inconsistency of annual home sales that seem to surge every three years, the steep home price increases over the last four years, and the lack of move-up home buyers in the market.<\/p>\n

Summer is typically the strongest time of year for the market.\u00a0 However, the National Association of Realtors reported that existing home sales decreased during June<\/a> and July <\/a>of this year (a decrease of 1.8 percent and 1.3 percent respectively).\u00a0 And July\u2019s Pending Home Sale Index<\/a> (projecting future sales) decreased 0.8 percent (nar.realtor).<\/p>\n

Of course, the NAR\u2019s take on this bump in the road is provided by their Chief Economist Lawrence Yun<\/a>.\u00a0 Yun described the discrepancy of wage growth to home price gains as a reason for this summer\u2019s home sale slide.\u00a0 He explained that the median home sale price increased 38 percent in the last five years, while hourly earnings only increase 12 percent.\u00a0 He points out the obvious, that sharply increasing home prices are creating an affordability gap, which is pricing many home buyers out of the market.<\/p>\n

Yet, according to the NAR, \u201cHome buyer\u201d traffic continues to grow, while the housing inventory continues to shrink (the national home sale inventory during July decreased 9.0 percent from the same time last year).<\/p>\n

Yun stated:<\/p>\n

\n

The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.<\/p>\n<\/blockquote>\n

Home sale inventory has been an issue for the housing market since its slow recovery began four years ago.\u00a0 Although many will explain away the dearth of homes for sale as a result of strong demand and quick home sales.\u00a0 However, they do not take into consideration that currently for every three homes that sell, there is one that does not.\u00a0 The 1 in 3 fallout is the expectation in a typical market, while there is only a 1 in 10 fallout in a market with strong demand (such as in 2005), so home buyer demand is not exceedingly strong.<\/p>\n

Of course, the main reason for the low housing inventory is that home owners are staying in their homes much longer than in the past<\/strong>.<\/p>\n

According to the NAR<\/a>, between 1987 to 2008 home owners stayed in their home an average of six years before buying their next home.\u00a0 However, since 2010, the average time grew to fifteen years!\u00a0 The result is a lower number of move-up home buyers in the market, and a reduced number of homes to sell.<\/p>\n

One of missing pieces to a stable housing market has been the move-up home buyer.\u00a0 The move-up home buyer is the buyer who will sell their current house to move into another home.\u00a0 The necessity of move-up home buyers was acknowledged as part of a healthy housing market way back in 1985, when the economy was recovering from the deepest modern recession at that time (Move-up Buyer Provides The Base For A Recovering Housing Market<\/em>. chicagotribune.com. August 17, 1985). Part of the housing recovery of 1985 was the increased participation of the move-up home buyer. As move-up home buyers “upgraded” to larger home, more affordable modest homes become available to first time home buyers.<\/p>\n

Low housing inventory combined with elevated first time home buyer activity has fueled home prices over the last four years.\u00a0 Until move-up home buyers are fully participating in the market, we will continue to see continued lack of inventory, steeper home sale price increases, and unpredictable market cycles.<\/p>\n

Copyright\u00a9 Dan Krell
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\nDisclaimer<\/a>. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Could it be that the housing market is still recovering from the great recession?\u00a0 Maybe, considering that the housing market has not fully returned to a stable cycle.\u00a0 Consider the inconsistency of annual home sales that seem to surge every three years, the steep home price increases over the last four years, and the lack … <\/p>\n

Continue reading “Move-up home buyers still absent”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[270,160,405,288,667,13,26,138,566],"tags":[490,879,466,987,991,797,593,869],"class_list":["post-3115","post","type-post","status-publish","format-standard","hentry","category-home-buyer","category-home-buyer-behavior","category-homebuyer","category-housing-market","category-move-up-home-buyer","category-real-estate","category-real-estate-market","category-real-estate-recovery","category-recovery","tag-home-buyer-2","tag-home-buyer-behavior","tag-housing-market-2","tag-housing-recovery","tag-move-up-home-buyer","tag-real-estate","tag-real-estate-market-2","tag-real-estate-recovery"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-Of","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/3115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=3115"}],"version-history":[{"count":12,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/3115\/revisions"}],"predecessor-version":[{"id":6255,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/3115\/revisions\/6255"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=3115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=3115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=3115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}