Are baby boomers who built or bought large houses around ten or twenty years ago now wanting to sell and retire now finding their houses hard to sell? Is that happening in your neighborhood? Do young two-income couples not want to buy big houses in the suburbs?
I saw a Wall Street Journal article teaser to that effect, but won’t link to it because it’s gated and I can’t read it. But I know that my sister in northern NJ, who had what I think is a wonderful large 3-story 4 bedroom house in a leafy suburb without good rail connections to NYC, had it on the market for about a year before it sold. In my Silicon Valley area, houses seem to sell in days, because we don’t have nearly enough housing here for all the people who work in the area.
Zero current experience (not planning on selling this house), but I do wonder if some of the slowdown has to do with the changes to the tax code for folks with new mortgages of at least $750k.
We sold our large family home last year within 24 hours of going on the market at full asking. It was priced competitively but not in an area known to be a “hot market.” We were frankly shocked it sold so quickly.
Homes in our new state are selling quickly if priced properly as well. If not, they are sitting on the market.
The SALT change? But the WSJ article at leats talks about big houses in the Sun Belt. Most of the Sun Belt doesn’t have high real estate taxes. So that could not be the entire story.
I agree it probably has more to do with tax codes and affordability than anything else. Unless a house is a monstrosity with a lot of wasted space in design, there will always be families who desire more square footage. I do believe busy families will prefer updated homes which a lot of downsizing sellers do not do before selling. A neighborhood close to mine has many larger homes, all 20+ year old. The ones that have updated kitchens and bathrooms sell quickly while the outdated houses linger.
In my area at least, most of the action is in cheaper and mid-range homes. The market for homes at the higher end of the market has been flat for a few years.
Nope. We’re waterfront in a state that doesn’t have state tax. Sometimes feels like we’re in one of the few remaining older (small) homes with all the Starter Castles going up as fast as people can buy the old homes and tear them down. I have zero sympathy for the retired Booz Allen jerk a few doors down who built a monstrosity that leaves barely enough yard to walk around it and has recently discovered that if you cover your entire freakin’ yard with tacky mega-mansion and fancy driveway that there is nowhere for the frequent rain to drain, so you have a lake in your driveway that stalls your Aston Martin… first world problems of people with too-large houses.
We were looking at fairly large homes in our new town and I can’t tell you how many sold before they hit the market or within the first 24 hours. My H would have appointments to go visit the first evening after work and they’d get cancel because there was already an accepted offer. The only houses that sat were the ones that needed a ton of work and were still overpriced. The homes that needed work that were priced accordingly also sold quickly but typically owners were overpricing. (You can read the home improvement thread and see that we bought a fixer ; )).
At least for us, our experience is also that it’s not a function of size but updates/upgrades.
It depends…and location and price make a big difference. I know folks in the Jersey burbs who sold rather large family homes in a very short time. It takes the right price and a real estate agent who knows the market well to do this.
Around here, the issue is that some folks bought their homes in the early 2000’s for nearly a million dollars and these same homes are now selling for $650,000 or so. They are great homes but there is a huge abundance of them…and they have not appreciated in value as the owners hoped they would.
We built our house in 1994-95…and it’s on a very small cut de sac which is rare in our community. Houses on this street have routinely sold quickly. That’s not the case on the busier through roads.
I don’t think it’s just the size…other variables as well.
7 large homes sold in about 10 days in our neighborhood at or just below asking. All were 25+ years old but updated. Higher end market had been somewhat flat the last couple years so this is a welcome improvement.
Quick look on Zillow for random houses in various parts of the bay area suggests that Zillow believes that house prices peaked late last year and are on a slight downtrend.
The article gives examples of areas in North Carolina as well as Scottsdale AZ and Kiawah Island SC. It claims that younger buyers want smaller houses.
Perhaps millennial buyers cannot afford the larger houses that the boomer generation wants to sell. After all, millennial people are not earning any more (adjusted for inflation), but they have more educational debt and probably more personal share of medical insurance and care costs, compared to the boomer generation. Also, in many areas, real estate prices have gone up more than inflation.
We sold our home in the VA/DC suburbs a couple of months ago a little over a week after we had listed it. $5K over the asking price and we had three offers. We worked for about three months preparing it for sale by doing a bunch of inexpensive cosmetic improvements and tried to stage it well. I was very surprised that we sold it so quickly as I was worried about the lack of major upgrades.
Our 4 bedroom plus suburban house (north of Seattle) sold quite quickly in the slow September market back in 2017. The young couple (techie dad, SAH mom) who bought it was happy to relocate into the suburb with a great school district. The SALT and mortgage limits are pretty much irrelevant for the majority of that part of the suburbs here because property taxes are still well under $10k (no state tax) on a house under $800k.
Giant, pompous, butt-ugly mansions are still going up in the city south of us… someone must be buying them or the builders are complete idiots.
The houses the article is talking about, and the houses in my sister’s town, cost a lot more than $400K.
My impression of SF Bay Area housing concurs with what @ucbalumnus says, that prices have flattened. But I’m certainly not seeing any houses stay on the market for a month, let alone a year.
For the sake of the rest of the people in the discussion, when someone says “in my area” it would be helpful to give a general notion of where the area is.
Seems like a “millionaire next door” or “FIRE” type millennial may have saved that much – but such a person may be hesitant to buy a more expensive house when a suitable less expensive one is available.
I do recall seeing one that was listed, then the listing was removed without sale not that long after. Perhaps there is less willingness for sellers and listing agents to keep a listing open for a long time if the house does not sell.
Also, the market in some areas may still be a seller’s market, but not as seller-favorable as before. E.g. a house may get an offer in a week now, but during a hotter market it would have gotten ten offers over listing price on the first day.