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Low Inventory Is Slowing Home Buying

Posted by Roman Bodnarchuk on Wed, Jan 04, 2017 @ 17:01 PM

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Why is inventory so low, especially for starter and trade-up homes?

There are 3 reasons:

First, investors bought many of the foreclosed homes during the recession and turned into rentals.

Second, a larger share of lower-priced are homes are still underwater compared to premium homes, which means that these homeowners are unlikely to sell and take a loss.

Third, and most importantly, rising prices are creating homebuyer gridlock

In other words, the spread of homes prices, specifically the growing difference between premium homes prices and trade-up home prices, is likely causing a decrease in trade-up home inventory.

 

To learn more about 2017 Real Estate Trends, click on a video below

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