Homeowners aren’t moving as much as they used to. And that’s a matter of consternation for a lot of people who want to buy right now. The market is running right around one month of inventory which confounds buyers of all stripes. According to the National Association of Realtors in their Home Buyer and Seller Generational Trends Report from this year, the median length of time that people owned their homes in 2016 was 10 years as compared to the trend from 1985 to 2008 where tenure was six year or less.
In the Sacramento Metropolitan area, there were 2,960 houses for sale in April and 2,137 sold for a population of over 2 million. Kind of staggering isn’t it?
So why are homeowners staying? Here are some of the more prominent reasons:
- Kids still in school
- Love their homes and/or neighborhood
- Home is underwater or low equity (due to the year of purchase or possession of second mortgages)
- Loss of job and/or reduction in income
- Don’t want to take on more debt close to retirement
- Aging parents live nearby and need help
- Too much work to move
A factor that may thwart the desire to move in the future when interest rates go up with an improving economy could be the 3.5% fixed interest rate that homeowners enjoy today
Of those selling, here’s some interesting statistics:
- The typical age of home sellers was 54 years old.
- Of all homes on the market, 63% didn’t have children under the age of 18 residing at home.
- Sellers under the age of 51 years old tended to trade up and purchase a home that was 400-700 sf more than what they sold which was a more expensive purchase. Buyers 52 years and older traded down by 100-200 sf and purchased less expensive homes.
- Sellers tend to buy close to where they previously lived preferring to stay within a median radius of 20 miles.
- Younger sellers cited one significant reason: the home was too small-37%.
- Sellers 62 years an up desired to be closer to friends and family-26%.
- Sellers in the middle (37 to 51 years) cited: home too small (26%) and job relocation (22%).
Here in Sacramento, I’ve heard some repeating refrains about the desire to be in a better school district, more desirable neighborhoods, and one story homes.
The shortage of housing isn’t going away anytime soon with the propensity of sellers wanting to stay and with builders still lagging behind on building the quantity of homes needed to meet demand. Not to mention that the lot sizes are so much smaller and that one story homes as a percentage of total inventory is shrinking with each new development.
The long and the short of it is that it’s a bit of a dance to sell and buy in this market. I’m committed to helping my clients find the home they love and also to helping them sell by problem solving the roadblocks that make it difficult to reach their real estate goals. Ask me how.