We have friends in a midwestern state capital city, that is also the site of the state campus flagship, that were advised by their financial planner to sell their 5bdrm, made for large scale entertaining, suburban house last fall. Their original plan was to do so in spring of 2020 once their 3rd child was well settled into her sophomore year at college. The reasons for accelerating that sale were: loss of property tax deduction, avoiding market impact of election year, freeing up the equity rather than moving other cash around to finance 3rd child’s college, increasing interest rates, changes in millennial housing preferences, moving into a job requiring less business entertaining at home, another phase of new homes coming in their development, etc. I am guessing that others were similarly advised in other parts of the country so there likely are a bit more houses of that size on the market. Their house sold within the average time for that area, but that average time has since increased so they feel they sold at the right time even though it was a bit of a scramble to accelerate their plan by a 12-18 months.
@Nrdsb4, I would have bid on that but it was lacking a moat. ?
@“Cardinal Fang” - this is what $2.7M apparently buys near “our” Google campus. I’ll take the Palo Alto one. It has a yard… 
https://www.redfin.com/WA/Kirkland/6224-Lake-Washington-Blvd-NE-98033/home/463176
@BunsenBurner, But look at the location of the one in Kirkland, right at Lake Washington.
I live in a very desirable school district in a burb that is equidistant from DC, Baltimore and Annapolis.
Houses generally sell quickly. This spring and summer a LOT of homes in my immediate neighborhood have sold. Most were built in the mid '90’s or later, and the entire area has a very cookie cutter feel. People are not living here for the vibe! They move here for the location, the schools and the well kept HOA amenities. We are having a huge turnover now, as boomers and younger people move out as soon as their youngest child graduates either high school or college or when they retire. Buyers are grnerally young, with children.
Also, I think the local market has finally rebounded to its 2007, pre-real estate crash levels. People who bought (in the entire DC/MD/NOVA burb area) in 2004-2007 were stuck underwater until recently. Those pre-crash years were crazy, as people (including a couple of my relatives) became a little frantic to snag a house, any house, before they were priced completely out of the market.
Interestingly, the 55-65 set who are selling, are not necessarily buying smaller homes. They are buying new homes, and homes/townhouses on very small lots because they don’t want the yard work. Or they are moving to a house with a view. They are moving to states with lower taxes. They are moving to the beach or to the mountains or to older, historic towns in the area. They are moving into DC or NYC condos with fabulous ammenities, (which may mean they have technically “downsized”).
@“Cardinal Fang”
Rumor is strong here that Patrick is headed back to the Sharks. My guess is that it won’t take a long time to see this one.
I think the OP made a good observation. From my viewpoint that seems to be the case. I’m in a high income Chicago suburb.
For instance a friend was able to sell her $1M home after an extended period of time. She would put the house on the market, take it off, put it back on…she did this a few times over a couple of years. The house was built around 25 yrs ago. It’s large and beautiful with currently popular colors and stylistic points in a good school district, but there aren’t that many buyers in that price range. Her realtor had told her there was over a years supply of million dollar homes on the market!
On the other hand there are a good number of 4 bedroom homes, around 3,000 sq ft, for sale that are in the $600K -$800K range that seem to be selling if they’ve been updated and in a good location. The number of homes that meet both criteria is a fraction of the actual homes at that price point.
I would say in our area, the answer is yes, but with a caveat. Most of my nieces/nephews and their friends who are around 30 seem to want an urban life-style and find it more affordable than the suburbs…though they were all raised as suburbanites. They like the fun the city offers…and maybe more importantly the flexibility to be able to relocate with less hassle. I think it depends on the ‘life-stage’ of the young two-income couple and of course their financial status.
Another NJ resident here, but I live much further out in “boonies”. Things seems to be moving, but they have to be priced right. My neighbor’s house has been on the market all year, $630k, dropped to $599k. Way overpriced if you ask me - slightly bigger than most of the neighborhood, about 3500 sq ft and more land, about 4 acres, but in NJ that means more property taxes!!! About $15k on this house whereas most of the neighborhood is more around 2500 sq ft, 2 acres and tax hovering around $10k. What has always kept prices by us lower than most of NJ is the distance we are from civilization - great for some things, not so great for commuting.
Another thing that hurts us is living very close to PA. More and more people are moving out there, taking on brutal commutes, but getting the same house for less and lower property taxes. Personally, I’d rather have the easier commute but I guess something’s gotta give! With telecommuting becoming more common, more people can probably justify the extra 10-20 miles for the monetary savings.
@bmac I think I know where you are and I’d love to sell and move into a 2 br townhouse there! Save me about 15k miles a year on my car!
Real estate trends in the Philadelphia area tend to be much more muted than in hotter markets. I live in one of the city’s wealthiest census tracts. It feels very suburban, but it has easy commuting and its own walkable business district. It’s beautiful. However, it’s not an area where public schools are an easy option, especially at the elementary school level.
The homes in my area run the gamut from small-ish row homes to bona fide mansions (no “Mc-” necessary). We never had the crash that much of the country had in 2008, but we rarely have really hot markets, either. A year ago, we were in a really hot market. One set of neighbors sold their house two hours after listing it, above asking price (and we thought their asking price was really aggressive). The pace has cooled down a little, but the only houses that seem to sit on the market are houses with real problems – houses that seem never to sell, regardless of price – and houses that are priced really really really aggressively.
4 years ago, my house sold for the aggressive asking price in an hour and forty five minutes. The house I bought was going to be on the market for one day. One day. Owners knew in that one day they would get several competitive offers, all over asking. The market hasn’t changed significantly where I live (central Denver.)
I do agree that there’s a competition for the smaller homes between young families and middle aged down-sizers. The smaller homes are what the young families can afford; the down-sizers want single level. Makes me wonder about those tall, skinny townhouses popping up all over the place.
Tall skinny townhouses put more houses on the given amount of land. Even if they need to sell for less each, that may still net more for the builder than a smaller number of single level houses.
I’m a gen xer. I noticed in my friend group both gen x and older millennials are starting families later or not at all. No one in my friend group had children in their 20s everyone was in their early to mid 30s. And when they do it’s 1 or 2. It is only one person in my friend group with 3 kids. That could also play a role in them looking at smaller houses.
Average family size has been trending down for decades but average house size has been increasing. Two have not really been related.
Answer to this question will depend on the area at issue (the old location, location, location thing). And will be somewhat house specific in that not all “big” houses will have the same appear for various reasons.
A house priced right will sell (in a normal market).
Two homes will be going up for sale in my immediate vicinity (suburban city near Seattle) this week. One was purchased by the late owner for $17K in 1961. The other was sold by the current owner’s parent to him a few years back. Both will have asking prices between $500-$600K, which is something pretty average for the area. I expect both will sell quickly.
A house down the street is currently listed for $699K and has been on the market for maybe 4 months. Way overpriced. The listing agents, I believe, led the owners to think that the zoning changes to take effect in 15 years justified a high asking price.
I’m curious who will buy the houses. Coming up with $100K+ for a 20% down payment is tough for young people. That’s the conundrum. Older boomers want to sell high to profit, but the very people who should be looking to buy a starter home can’t save the $$ in a high COL area.
There are certainly ways to get into a house with less than 20% down.
^there are but i hope banks resist because that’s what led to the 2008 crash…lax lending practices. People buying more house than they could or should afford because the banks lent them too much money. PMI can help but as a general rule buyers should not be financing 95% of their purchase price.
Incorrect. Young couples putting 5% down payment on their first house was not what let to that housing crisis.
“Coming up with $100K+ for a 20% down payment is tough for young people.” @zeebamom At 30 I and many of my friends had bought our first house. Fast forward to today – my daughter is 31. Only a couple of her peers bought houses. And every single one of them had significant financial help from parents – either they received a large part of the downpayment as a gift from Mom/Dad/Grandma… or were able to save that much money by moving in with Mom/Dad/Grandma for a couple of years and not paying rent. It’s very different for kids today. I don’t envy them…
I think there are lots of places in the US where it isn’t hard to come up with a down payment…it’s just that most young people want to live near urban cores which have historically always been expensive. It is also where the jobs are.
@BunsenBurner i didn’t say it did…I said lax lending practices led to the mortgage crisis which is essentially what the 2008 crash was about. However, putting down 5% in my opinion would constitute a poor lending practice because banks should want more equity (or require private mortgage insurance to cover such a large loan to value ratio), particularly for a first time home buyer.