Last week, I broke down the various price ranges in real estate and what we might expect for the coming year. I mentioned that the 400-800K price range might be the toughest price range to sell for a variety of reasons. Let’s take a look at what we know about this demographic.
The buyer for the 400-800K range is generally what we refer to as a ‘move up buyer.’ They are probably living in a 300-500K home and are looking for their next move up. The problem with this demographic is that they have been hit hard by the economy. Many have lost good paying jobs and as a result, are struggling to stay in their current home. The thought of buying a bigger, more expensive home is not even on their radar. If they are still employed and wanted to move up, they have a few challenges. The first is that they need to be able to sell their current home. Many may be underwater on their current house and don’t have the cash to buy their way out. If they do have the cash to buy their way out, they won’t have enough for a down payment on a new home.
The next problem area that this group falls into is lending. The guidelines have become so strict that many buyers in this price range can’t qualify for a loan. The required down payment is too large, the credit scores needed are too high, and or the documentation needed for approval can’t be met. If you can’t sell the home you’re in and you can’t qualify for a new loan, that’s two strikes against you.
All of the above factors contribute to make this price range one of the toughest to sell in this economic market. Don’t misinterpret what I am saying here. Homes in this price range do sell and will continue to do so in the future. This price range just might have a few more challenges than others.
Finally, I have a personal announcement for all of you who read this column so faithfully week after week. I have decided to leave Fuller Sotheby’s for another opportunity. I want to thank everyone at Fuller for their love and support over the years. They are fantastic people to work with and for. I wish them much success.
I have been asked to become one of the Broker/Owners of Keller Williams Realty DTC and to help build a luxury division of that company. I am excited about the opportunity and the possibilities. I am still representing clients in buying and selling homes; I am just doing it under a new title and banner. I look forward to continuing this column each week and in serving you.