Real Estate Marketing & Beyond
The overall number of homes for sale is now beginning to rise after nearly two consecutive years of declines. While this is obviously good news, it's not so great for first-time buyers and for people on lower incomes.
The number of lower-priced homes for sale is still falling due to high investor activity and high levels of negative equity preventing these properties from coming on the market. According to Zillow, the numbers of homes for sale in May increased by 11.8% year on year, and were up 4.3% from April. The numbers of homes for sale has risen for the last three months as it is likely many would-be sellers are keen to capitalize on recent house price gains. In particular more people are interested in moving home so they can take advantage of low interest rates.
However most inventory increases were for mid-priced homes and those in the top tier of home values. In comparison the number of homes for sale in price brackets attractive to first-time and lower income buyers decreased year on year in 28 of the nation's largest metro areas.
Unfortunately this does mean that the market is still tough for first-time buyers, and high demand can lead to rapid price increases making such homes even less affordable for people looking to buy in these price brackets. Real estate experts hope the inventory gains seen in the middle and upper tiers of the market will begin filtering down to the more affordable homes in the near future.
In addition, those hoping to purchase homes at the lower end of the market often have to compete with cash buyers. According to the article in aol.com, a recent report by Zillow found that more than a third of sales of lower-priced homes in 27 out of the top 30 metro areas were made with cash. In particular, lower-priced properties in Detroit, Miami and Tampa accounted for more than 80% of all cash deals for lower-priced homes.
Another problem is the number of underwater homeowners, as high levels of negative equity are keeping more affordable homes from coming onto the market. Underwater homeowners can find it very difficult to try to list their property for sale. Unfortunately the most affordable homes are around three times more likely to be underwater compared to those in the top price brackets. Nationally, home values increased by 0.1% in May from April up to $172,300. Home prices have now risen for 28 consecutive months.
