Buyers Search For Starter Homes In A Sea Of Premium Listings

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February 08, 2017

According to data from Trulia, nearly 27 percent of all searches were for starter homes during Q4 of 2016. Problem is, only 21 percent of listings were available at that price point.

Trulia analyzed “market mismatches,” the difference between what potential buyers are searching for and what homes are actually on the market. Of the 100 largest metros, three-quarters of them had a larger share of starter home search search activity than a percentage of starter home listings.

In particular, first-time buyers are having trouble finding available homes in Dallas, Houston, Charlotte, Raleigh, N.C., and Colorado Springs, Colo. (Places such as Philadelphia and Detroit, though, have a surplus of starter homes on the market).

Meanwhile, premium home buyers have their pick of the litter, with 44 percent of the searches viewing 55 percent of all listings.

This disparity, with increasing numbers of metros experiencing a shortage of starter and trade-up listings and fewer metros with enough interest to match the proportion of premium homes, is the largest it has been in at least two years. It leaves Americans who are in the market for a home increasingly chasing too fewer options in lower price ranges, and sellers of premium homes more likely to be left waiting longer for a buyer.

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