When buyers are ready to purchase their first place, most are in the market for something relatively small and economical — in other words, a starter home. These diminutive dwellings are a smart first move for newbies because, ideally, they offer a chance to build equity without over-burdening the budget or requiring more maintenance than a novice homeowner is prepared to undertake.
But, as time passes, that once-sufficient space begins to feel a bit cramped and owners may find themselves pondering putting their starter home on the market.
If this feels like a scenario you can relate to, there’s no time like the present, as the old saying goes. “Why?” you ask. Read on!
1. Inventory is disappearing
Anyone who’s been shopping for a modest starter home lately knows, it’s slim pickins out there. It’s not just your area in suffering a shortage either; it’s nationwide. In fact, according to Trulia Inventory and Price Watch, the number of starter homes has dropped 8.7 percent in the last year.
One reason inventory is limited is that senior citizens who previously sold their houses and moved to assisted living facilities or nursing homes are embracing the aging-in- place trend.
That decision is making it difficult for millennials and first-time homebuyers to find affordable houses for sale. According to Trulia, those 55 and older own 53
percent of U.S. owner-occupied houses, which is the largest percentage since the
government started collecting data in 1900.
Investors, too, are responsible for the shortage of starter homes available at attractive prices as after the 2008 recession many swooped in and scooped up lower-priced houses to improve and flip, upping property values exponentially.