Sub-$200k Drought

More often than not, first time home buyers need to purchase under $200,000.

Well, according to our friends at the Cromford Report, those first-time home buyers hoping to buy a single family home for under $200,000 may want to hurry it up.

New single family listings per month in this price range have been steadily declining since 2010 and have dipped below the level of sales for the past two months with June looking to follow suit.

Very few single family homes have been built to add to supply for entry-level buyers as most builders have been placing their bets on multi-family (apartments and condos) for the past few years. Thus far in 2015, condos and townhomes accounted for 24% of new listings under $200k compared to 22.5% last year and 23% of sales compared to 21% last year. As supply in the single family market continues to restrict on the low end, condos and townhomes may become more attractive. However due to high percentages of investor-owned units, financing may prove difficult.

Notice that in April and May (below) that the number of listings surpassed the number of sales. So, it was listed, it was sold. Personally, I suspect that this will change for the summer, as there are fewer people around to purchase.

My advice: First, if you are looking under $200k, the summer might be the best time for you. You might have to deal with the heat while you look, but I fear that this trend will get worse once the temperature drops. Second, leave yourself open to condos, patio homes or town homes.

Regardless, give me a call at 602-456-9388 and let’s build a strategy that works for you.