First Time Buyers Struggle With Limited Inventory, High Prices
Home values are rising the fastest among entry level homes in more than half of the largest U.S. housing markets, according to first quarter Zillow Real Estate Market Reports. Rising homes values in this segment of the market can be attributed to a lack of supply, with 10 percent fewer homes for sale this year compared to last.
The median value of entry-level homes, those at the bottom third of the market, rose the most over the past year in Denver, up 20 percent followed by Portland and Dallas. There are 13 percent fewer entry-level homes available in Denver than there were a year ago. The number of entry-level homes available declined the most in Portland. There are 40 percent fewer entry-level homes available in Portland than there were a year ago.
The findings signal difficult times ahead for first-time homebuyers looking to enter the market. Going into home-shopping season this spring, buyers will find fewer homes in the bottom and middle of the market, which are the homes most affordable for first-time buyers. The trend also highlights the different experiences buyers are having in the recovering housing market. Buyers looking for the most expensive homes will find slower price growth, a larger selection, and less competition this spring than entry-level buyers who are likely to face stiff competition, bidding wars, and very few homes to choose from.
“It’s going to be a tough home-buying market this spring, especially for first-time buyers or people looking to move up into a slightly more expensive home,” says Zillow Chief Economist Dr. Svenja Gudell. “In order to stand out in a competitive market, buyers should get pre-approved for a loan, find an agent who has experience with bidding wars, and consider coming in at the asking price or higher, so the seller knows they’re serious.”
In all of the largest U.S. housing markets, more than a third of the homes available for sale are in the most expensive segment (top-tier homes). These homes are the most likely to have a price cut, a signal that there is less demand for top-tier homes.
Information provides by: http://www.zillow.com/research/data.
My name is Stephanie Albright and I specialize in helping buyers and sellers invest in real estate in South Florida, Treasure Coast and the Palm Beaches. I have 15 years of experience in the real estate industry which allows me to bring tools and solutions that exceed the expectations of my clients. I currently hold real estate licenses in Florida and Tennessee.
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