Courtesy of Mish.
Supply of homes at the bottom-third of the market is down 17 percent from a year ago.
Meanwhile the top-third home supply is up 15 percent while the middle is up a modest 3 percent according to Redfin.
The bottom third is anything priced below $198,000.
But $150,000 or $200,000 does not buy in terms of size and location what it did just a few years ago.
Overpay or Be Shut Out
So once again, first-time buyers face the question “overpay or be shut out?” And once again it appears many make a very poor choice.
Bloomberg has some examples in First-Time Buyers Shut Out of Expanding U.S. Home Supply.
The four-bedroom house that Ilia Nielsen-Dembe purchased in west Denver earlier this year wasn’t her top choice. The first-time buyer had to settle on a home in a neighborhood with a high crime rate after losing out on bids for five properties in more desirable areas.
“I definitely sacrificed in terms of location,” said Nielsen-Dembe, 33, who lives with her husband and two daughters in the house she bought in April for $184,500. “I had to cross streets that were not ideal in order to get a house.”
In Denver, entry-level listings in June were down 51 percent from a year earlier, while the upper-end supply was up 4 percent, according to Redfin. Austin, Texas, inventory jumped 14 percent in the top third of the market and fell 34 percent at the bottom. In Atlanta, where Wall Street-backed investors descended to buy homes to turn into rentals, low-end supply declined 13 percent. Top-third listings rose 18 percent.
Sharlene Hensrud, a Realtor with Re/Max Results in Plymouth, Minnesota, said buyers of cheaper homes have had to adjust expectations because the bargains have been picked over.
She recently took a couple on a tour of homes for about $140,000 and said they were quickly discouraged that a one-bedroom, one-bath house with no garage was all they could afford. A few years ago, a three-bedroom property would have been in their range, Hensrud said. …
