Monday, October 29, 2018

Starter Home or Forever Home?

This weekend's New York Times had a very informative article titled "So Much for the Starter House".....and it went into an explanation of why so many folks are opting to stay in their homes and remodel, as opposed to moving "up" into a larger home or better neighborhood.  Much of the article hits home as it goes into detail about why a lot of people make the choice to "not" move up. For example,  many millennials are saddled with student debt and are buying their first homes later in life.   And, with inventory very tight, home prices are higher and interest rates have been rising.

Frequently,  when a young couple bought their first home, it was a "starter" home where they thought they'd probably stay for a few years,  build up some equity, sell that home  then buy in the neighborhood they "really" wanted to live in.  Their "forever" neighborhood and home.  Well,  statistics show that hasn't been the case these past several years.  According to the National Assoc. of Realtors,  folks are staying in their homes for an average of 10 years......when, historically, that number used to be 6 years.

Being I've been listing and selling homes for 40 years now,  I tend to believe much of what was stated in this article.  Wages have increased, but so have home prices.  When I first started in the real estate business I could barely even say "$100,000" !!!  Now, all these years later,  you're lucky if you can even find a home for $100,000.  It would certainly be a challenge to find one in California anyway.  And when 2 bedroom homes started selling for $200,000 in Land Park my first thoughts were "no way"!  Well,  "yes, way".........and when the first home on my block sold  many many years ago for $400,000  none of us could even believe it!  You would have thought it was a million dollars.

As a result of buying in what one might think of as "not their first choice neighborhood",  they're seeing a great resurgence of others doing exactly the same thing.  Not only are buyers moving in and sprucing the house up,  new businesses and restaurants are moving in as well.
Folks are moving in,  painting, remodeling and fixing up their "starter" homes.   I've seen it in several areas right here in Sacramento.  With rents going sky-high,  it makes sense to buy a more modest home where your payment probably isn't going to be much more than what you'd pay in rent someplace.  Really!   (Especially if you've checked out what some of the lofts and/or small apartments are being rented for in downtown/midtown Sacramento!)  And,  you'll be gaining equity in owning your own home.  And taking pride in your new neighborhood.   And,  if the New York Times article is correct,  you're going to stay there for close to 10 years.

Yes,  when families grow, their housing needs grow too....so there will always be "move up" buyers. And there will always be divorces and older folks moving into senior housing or moving closer to their children,  but knowing that there are still "marginal" neighborhoods that appear to be "up and coming" is wonderful for those seeking to buy their first home.  And who knows,  this may be their "forever" home as well!

If you're looking to buy or sell...or have friends or relatives who are, call email or text me. Or if you know someone who is being relocated and needs a great Realtor in the city they're moving to, I can help you with that too.  I can put them in touch with a Realtor in the city they're moving to!

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