If the number of sellers I have been meeting with lately is any indication, 2015 should be a great year for everyone planning to buy or sell a home!
After years of inventory shortage, the total number of homes for sale finally climbed above levels the previous two years in mid-2014. I am working with more sellers than ever at this time of year getting ready to sell… a good sign that inventory levels should continue to strengthen in 2015.
My experience showed that last year was the year when many move-up buyers were finally able to make a move. But it was interesting that many of the 'first-time homebuyer' type homes were selling to people who were downsizing rather than to first-time homebuyers.
Nationwide, first-time homebuyers in 2014 made up the smallest share of buyers since 1987! In 2010 50% of home sales were to first-time homebuyers… last year it was only 33%.
But take a look at the chart below… inventory levels in 2014 were significantly lower than they were in 2010-2011 (red line vs blue & tan bars) so they didn't have nearly as many choices of homes to buy. First-time homebuyers usually don't need to buy and will wait until they find a home they want to buy… many may still be waiting.
If the number of homes available for sale does indeed continue to grow, that may bring more first-time homebuyers back into the market… which in turn provides a kick-start for the whole real estate cycle as move-up buyers have buyers for their homes so they can move up to their next home, etc… a healthy real estate market.
It feels like 2015 may be the year when the market cycle gains healthy momentum… interest rates are still amazingly low, but rent is rising… first-time homebuyers, this could be your year!
Sharlene Hensrud, RE/MAX Results
The team at HomesMSP - Sharlene, John, Angela – Minneapolis-St. Paul Realtors