Potential homebuyers: does it look like there isn't as much selection of existing homes for sale as you were anticipating? It's not your imagination. Tennessee residents may be surprised to hear that the number of existing homes for sale in the residential real estate market has reached a low that hasn't been seen in two decades. Why? According to one survey it is because "Baby Boomers" are neither selling their homes to downsize after their kids fly the nest, nor are they selling their homes in order to purchase a bigger one. In fact, of those surveyed, 59 percent reported that they had no plans to sell their home within the next 12 months.
Across the country, in June the market had a 4.3-month supply of houses. In June 2016, that number sat at 4.6 percent. This reduction in available homes for sale raises home prices. According to one resource, the national home price index is at a record high at 5.6 percent.
For these reasons, many people looking to buy their first home are seeking out more modestly-sized houses or even condominium units. Among the Baby Boomer generation, 78 percent own their own home -- two times as many as the Millennial generation. Moreover, even Baby Boomers who are considering downsizing to a smaller home are coming up against the same housing shortage and uptick in prices Millennials face.
Of the 35 percent of homeowners who do say they are going to put their home up for sale within the next year, over 50 percent were Millennials, wishing to upgrade to a better home. When it comes to starter homes, the number of homes on the market has decreased 17 percent from last year and the number of medium-sized homes on the market has decreased 10 percent. Therefore, Millennials who are looking to put their home up for sale are in a good position to do so, as starter homes are still the most sought-after in the current market.
It remains to see how the next year will pan out for the real estate market. In the meantime, those who are looking to buy or sell a home may want to reach out to an attorney, to ensure they understand the legal ins-and-outs of the world of real estate.
Source: USA Today, "It's not just you - there really are fewer homes for sale with inventory at a 20-year low," Roger Yu and Paul Davidson, Aug. 10, 2017