Why? Because most people are not investors. They use their sales profits as a down payment on a new home - in the same market in which they just sold.
But because those homes are also priced high, many current owners are staying put, uncertain they’ll be able to find anything on the next tier that makes economic sense.
After years of struggling to build equity, they’re leery of overextending their carefully crafted housing budget.
Some move up without selling at all – they rent out the old place to somebody else. The tight market means there’s never a shortage of wannabe homeowners forced to rent. In most cases, the old mortgage is covered by the rent. In some cases, there’s a tidy profit!
But the seller’s dilemma is very real for those counting on a sale to make their next down payment.
Make sure to choose professionals who are skilled and experienced in buying in a seller’s market, too.
They know the ins and outs of the process and can provide tremendous insight regarding upcoming inventory.
Many sellers consider new construction. Builders may want to capture starter-home demand, but they know that will come at a cost to their bottom lines. Only 16 percent of new homes are addressing the inflated starter market.
More than 50 percent of available new homes are mid-range, with price tags between $200,000 and $400,000.