CLARK: Closer Look at Market Dynamics

According to Realtor.com millennials are more motivated to buying a home and are most likely to gain market share in the last six months of this year. This is supported by the results of a consumer behavior survey of more than 12,000 millennials taken between January 1, 2015 and June 15, 2015.

Chief economist for Realtor.com, Jonathan Smoke, is optimistic about 2015 due to strong sales and rising home prices. He also believes the increasing interest by millennials will result in more first-time buyers buying homes in the last half of this year.

Older millenials (25-34-years-old) are visiting Realtor.com in search of homes. This market segment is very important to the health of the real estate market as they can have a significant impact on housing.

Realtor.com has seen in the first half of last month an increase of 23% of older millienials looking to purchase a home. This is up from 21% in January of this year. Also observed in mid-June are these older millenials responding that they wish to buy a home in the next three months.

First-time buyers were only 27% of the market last summer according to the National Association of Realtors (NAR). It is expected as the economy grows, we can expect first-time buyers to comprise 40% of the market. According to NAR, should this occur approximately 15% of the number of total homes sold would be added. This would translate to 15% more homes being sold.

Millenials found the lack of affordable homes and not being able to find homes that satisfied their needs as the key reasons for not buying. Other reasons cited were not being able to find a home within budget, needing to improve credit scores, having insufficient down payments, obligated to a lease and limited time to look for a home.

Connecticut Realtors reported that single-family home sales in our state increased 3.7% when comparing May of this year to May of last year. However, the median sales price was slightly (0.4%) lower in May of this year compared to May of 2014. It is a positive development when single-family sales are up and prices are stable.

Condominiums and town homes sales dipped 1.9% when comparing May of this year and May of last year. The median sales price increased 3.2% in May as compared to May of 2014. Down-sizing seniors are looking for these homes, but cannot purchase them until they sell their existing larger homes. In some cases, many seniors have waited a bit longer than needed to down size and are not prepared sufficiently for this move. Health issues can occur swiftly and unexpectedly; and aging in place may not be an option. The financial ramifications of moving and allowing for other expenses are not known and planned. Managing financial portfolios should also include real estate properties having to be sold and bought due to life-style changes.

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected]

Enjoy your fourth of July!

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