SANTA CLARA, Calif.,
Aug. 10, 2017 /PRNewswire/
-- The U.S. real estate market is currently experiencing the
worst inventory deficiency in 20 years, which new data from the
realtor.com® Housing Shortage Study, released today,
suggests can be attributed to two primary reasons – boomers'
reluctance to sell and homes fitting current family needs.
Realtor.com® is a leading online real estate
destination operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS,
NWSLV] subsidiary Move, Inc.
The findings are part of an online survey of 1,054 randomly
selected homeowners across the U.S. conducted on behalf of
realtor.com® between July 6 and
13. The respondents were asked a series of questions aimed
at examining the root causes of the current national inventory
shortage.
Millennials plan to sell next year
According to the
results, approximately 59 percent of respondents are not planning
to sell their home in the next year, with nearly 35 percent
planning to sell, and nearly 6 percent unsure. Taking a look at age
segments of those with plans to sell next year reveals 60 percent
of these potential sellers are millennials who are selling to move
to a larger home (25 percent), or one with nicer features (24
percent).
Millennials with plans to sell could mean good news for buyers,
as starter homes remain the most sought after price point in
today's market. In fact, the supply of starter homes in the market
is down 17 percent year over year, as compared to medium sized home
inventory which is down 10 percent, and larger size home supply
which is down 5 percent year over year.
"The housing shortage forced many first time home buyers to
consider smaller homes and condos as a way to literally get their
foot in the door," said Danielle
Hale, chief economist for realtor.com.® "Our
survey data reveals that we may see more of these homes hitting the
market in the next year, but whether these owners actually list
will depend on whether they can find another home."
While baby boomers plan to stay put
Breaking down
those not planning to sell by age points toward one significant
contributor to the housing shortage – 85 percent of baby boomers
surveyed indicated they are not planning to sell their home in the
next year. Homeownership among boomers, at 78 percent, is nearly
twice as high as millennials, at 41 percent. As boomers decide to
stay put so are approximately 33 million properties, many of which
are urban condos or suburban single-family homes – the most popular
choices for millennials.
"Boomers indeed hold the key to those homes the market
desperately needs, both in the urban condo and the detached
suburban home segment," said Hale. "But with a strong economy and
rising home prices, there's really no reason for established
homeowners to sell in the short term. Although down-sizing might be
on the minds of boomers, they face the same inventory shortages and
price increases plaguing millennials."
Historically, older age groups have moved about four times less
than younger age groups, and while that ratio has somewhat remained
stable over time, the population mix has not. The share of the
population between the ages of 55 and 74 years old has increased by
30 percent in the last 30 years from 16 percent in 1985 to 21
percent in 2015.
Overall top reasons for not selling
When those with
no plans to sell were asked why they wanted to stay put,
approximately 63 percent indicated their current home meets the
needs of their family. The other most popular reasons include low
interest rates (16 percent), recently purchasing their home (15
percent), needing to make home improvements and low property taxes
(each cited by approximately 13 percent of respondents).
"Life events drive real estate transactions," added Hale. "When
the majority of home owners feel their family needs are being met
by their current home, there is nothing compelling them to put
their home on the market."
Top reasons for not selling by generation
According to
the survey's findings, the reasons for staying put differ
significantly by age. For instance, 72 percent of baby boomers
indicated their current home fits the needs of their family. This
is followed by low interest rates (16 percent), concerns about
financial security (13 percent), and the need to make some home
improvements (12 percent).
A majority of millennials, 52 percent, also indicated that their
top reason for not selling is their home fits their family needs.
This was followed by 27 percent recently purchasing their home and
approximately 16 percent citing low interest rates. For gen Y, the
top reasons not to sell include: home meeting family needs (65
percent), low interest rates (16 percent), and low property taxes
(16 percent).
A key reason for homeowners staying put for a longer period,
according to the National Association of Realtors®, is because of
inadequate levels of new home construction over the past
decade.
To read more about the study, please visit:
https://research.realtor.com/housing-shortage-boomers/.
About realtor.com®
Realtor.com® is the trusted
resource for home buyers, sellers and dreamers, offering the most
comprehensive source of for-sale properties, among competing
national sites, and the information, tools and professional
expertise to help people move confidently through every step of
their home journey. It pioneered the world of digital real estate
20 years ago, and today helps make all things home simple,
efficient and enjoyable. Realtor.com® is operated by News Corp
[NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a
perpetual license from the National Association of REALTORS®. For
more information, visit realtor.com®.
Media Contact:
Realtor.com®
Janice McDill –
Janice.McDill@move.com
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SOURCE realtor.com