The Sacramento Bee recently reported that the “move-up” buyer (the one who has the starter home, and now, a growing family) has no way to sell the old house and move – anywhere.
A fascinating statistic was reported by the Bee:
“Andrew LePage is an analyst with DataQuick, a San Diego real estate information firm. He said the lack of move-up buyers can easily be detected by looking at what’s happened to sales of homes in the $250,000-to-$600,000 range.
In 2006-07, when the local market was near its peak, that segment accounted for 70 percent to 80 percent of all sales in the Sacramento region, according to DataQuick. These days, homes in that price range account for less than 19 percent.” ((Read more: http://www.sacbee.com/2011/08/29/3868485/generation-of-homeowners-stuck.html#ixzz1aPXy6jHp ))
80% down to 20%. That is where the market transaction counts are as well.
“Starter homes” are being bought up by savvy investors, who can rent them for more than the mortgage, because they can be bought cheap. But what about the “middle?”
Just like the middle class on every other front (loss in income levels, increased taxation, stagnant employment) the middle home-buyer-owner market is stuck in the mud.