People tend to stay in their homes for quite a while. In fact, from 1985 – 2008, the median term of owning the same home averaged exactly 6 years. However, things changed. Since then, that average has increased to almost 9 years, which is a 50% increase.
Unbelievable but true – organizations such as the National Association of Realtors does track that type of information.
Why the Change?
Here are some of the many reasons for this change.
The Housing Crisis
This put many homeowners into a negative equity situation. This means that due to falling prices, the property’s mortgage exceeded the property’s sale value. Prior to that, home values were rising sharply. However, uncertainty about the economy made many homeowners thank more conservatively about moving. But now, the market has recovered. Home prices have risen dramatically. In fact, over 93% of homes now have a positive equity value. In addition, over 79% of homes have at least 20% equity value. Combined with an increasing economy and rising wages, many homeowners are now in a better financial situation than before.
Historically, the beginning of the whole process is young homeowners buy their first homes. Or they move to accommodate their growing family. And sometimes they’re looking for a better school district for their children. The point is, each time this happens it sets a chain of events going. The sellers buy a bigger home and eventually the seniors begin to downsize. Consequently, they move into smaller homes or adult communities. But, the rate of home ownership for young families is still behind the previous generation’s. As a result, this is the cause for the median home ownership tenure to be greater.
How Does This Effect Housing?
Due to the above, many home owners are currently living in housing that is no longer appropriate for them. It could be millennial couples who are planning a family, But, they’re still living in a one bedroom condo. Baby boomers are remaining in their four bedroom colonial home. Even though the last of the children have moved out. These owners are ready to make a move. And, since there is a lack of housing inventory, this could be great news if you’re a seller.
Are you ready to planning to move? Contact us.
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