Home sales to potential first-time homeowners are on the decline. And now experts who have examined the data are speculating that one of the biggest reasons for this downturn is that low-cost starter homes are no longer as readily available as they were in years past. Worse yet for prospective homebuyers with minimal assets (including individuals who may have only recently entered the job market or started families): the few starter homes that are on the real estate market are being purchased by investors and then converted into high-priced rentals.
RealtyTrac, a real estate information company and online marketplace for foreclosed properties, recently conducted a study on behalf of Credit.com. The study found that just 48 percent of all single-family homes sold in the U.S. during the first five months of 2016 had final closing prices of less than $200,000. This is a steep decline from the 63-percent figure in 2011, which itself was a significant drop from 2000, when approximately 70 percent of all single-family residences in the US sold at an affordable cost.
The last time fewer than half of all single-family homes were available at inexpensive prices was at the height of the housing bubble, just before the bubble burst and the latest economic recession hit.
Daren Bloomquist, senior vice president of communications for RealtyTrac, noted that a property that used to serve as a starter home is now “much more likely to be a rental property than a starter home.”
The bottom line is that homes are becoming more and more expensive, effectively pushing first-time homebuyers out of the real estate market and into the rental market. For those without vast financial resources, options have gotten limited. Many people who may have been in the market to buy a home now feel compelled to wait a few years longer before becoming homeowners.
For more information, read the Yahoo.com article, “Why Starter Homes Are Disappearing.”
If you are thinking about buying a home in New Jersey, it is important for you to talk with a qualified real estate and debt relief attorney. Joel R. Spivack, Esq., is an experienced real estate and debt relief lawyer who can guide you through the home buying process. Contact Mr. Spivack to schedule a free consultation.
