Real estate agents could be seeing weaker traffic at open houses this summer, as some demoralized shoppers drop out of the hunt – facing minimal choices at lower price points, strong competition and home prices growing faster than their incomes.
That doesn’t mean overall prices will be decreasing any time soon. Far from it.
Pent-up demand and ultra-low mortgage rates have pushed home prices in many markets near all-time highs – and a record national median of $247,700 in June, according to a recent report from the National Association of Realtors.
After accumulating $260 billion in equity in the first quarter of 2016 alone, 61 percent of existing homeowners believe they can find a buyer quickly, earn a large profit, and use the gains to purchase an even nicer home.
As a result, prices should continue to surge.
So how can a real estate agent help young buyers to fight back against the pricing heat?
Prices an hour or more’s drive away from the major metros are 20 to 50 percent lower than closer-in suburbs – it often boils down to marketing a different version of the American Dream.
Get familiar with these neighborhoods and point out any amenities that might be lacking in the more popular suburbs or urban cores.
Besides more “bang for your buck,” many of these extended “bedroom” communities offer a small-town feel and more access to outdoor recreation.
A growing number are stretching their search parameters outside their comfort zones –accepting that a long commute is the tradeoff necessary to get in the market at the ground floor.
Be at the forefront of presenting these more affordable choices to buyers as those decisions become more commonplace.
Source: Bay Equity Home Loans Newsletter, 19 August, 2016