Trulia Report: Homes in the First Time Buyer Range in Short Supply.
As a rule I’m not impressed with Trulia. Their home values are skewed by incomplete and vague information, and often the availability of a specific property is inaccurate i.e. not corresponding to the MLS data from which it is borrowed. Having said that, Trulia’s Inventory and Price Watch report cited below appears to be right on point, at least for our area of the Southwest and a good percentage of the rest of the country. Relatively low mortgage interest rates will likely keep starter houses flying off the shelves but homes in the first time buyer price range are indeed getting harder to come by.
Within the Greater Phoenix Valley there is a highly active new construction industry, but developers have been telling me that subcontractors are in scarce and overworked, and though builders would like to be progressing faster it is virtually impossible. The average time frame from contract on a new-build home to completion is around 8 months or more. This has a negative effect on the starter home market via the theory of economic mobility.
Housing inventory continues to be sorely constrained, with the starter home segment dropping 12.1 percent year-over-year this quarter, according to Trulia®’s recently released Inventory and Price Watch report. The shortage, as it stands, will require homebuyers to pay an average 1.9 percent more of their income to a buy a starter home.
“Tight inventory will still be a big obstacle to homeownership in many markets further into 2017, but I’m cautiously optimistic that we’ll see the bottom of the current housing shortage as the year progresses,” says Trulia Chief Economist Ralph McLaughlin. “That said, buyers might not see price relief if government policies boost demand without additional housing supply.”
Those in the market for a starter home will need to spend 38.5 percent of their monthly income, on average, Trulia estimates, representing lessening affordability.
Trade-up home inventory also dropped this quarter, down 12.9 percent year-over-year, according to the report. Premium home inventory declined less, at 5.6 percent. Those in the market for a premium or trade-up home will need to spend 13.9 percent and 25.5 percent of their incomes, in that order.
The worse starter home shortages are in coastal markets, including Portland, Ore. and Tacoma, Wash., the report shows. Other markets severely lacking supply include Los Angeles, Calif., Sacramento, Calif., San Diego, Calif., San Francisco, Calif., and Miami, Fla.
“As mortgage rates continue to trend upwards, homebuyers in the costly coastal housing markets in California and the Northeast may get some relief,” says McLaughlin. “Rising rates will likely cool the fierce competition in these markets where inventory has been tightening and affordability has worsened.”
For more information, Call or Text: 602-999-0952
eMail: golfarizona@cox.net
Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management
For more information, please visit www.trulia.com. Reprinted with permission from RISMedia. ©2016. All rights reserved.
Thinking about buying a brand new home? Our New Construction Discount is perfect for you! Don’t visit construction sites without your agent. Representation is FREE and remember, the sales person at the construction site works for the builder, not for you!
New Construction Discount Details
Find/Search ALL New Construction Homes for Sale in the Greater Phoenix Area
Ever wonder what Closing Costs you’ll be responsible for when you buy or sell a home? Check out our infographic and article:
Who Pays for What?
— — —
What is standard and legal procedure in a Real Estate transaction?
Offers and Agreements 101
Additional Helpful Information for Home Buyers
— — — — — — — —
Help for Home Sellers
Order a Market Analysis Online
