The Morning Report
Get the news and information you need to take on the day.
We’ve been hearing for a while that sales are booming in entry-level homes. Buyers using government programs for first-time homebuyers are facing stiff competition: investors wielding cash who want to buy and rent out the reduced-price homes.
North County real estate broker Jim Klinge posted some fascinating numbers today that illuminate that trend further.
In the three weeks between Sept. 15 and Oct. 3 this year, 504 homes sold that were priced less than $300,000. That’s compared to 11 in the same time frame two years ago.
That’s a 4,482 percent increase.
Contrast that with homes priced $750,000 and higher. This year, 172 homes sold in that range in those three weeks. In the same period in 2006, 245 homes sold in that range.
That’s a 30 percent decrease.
Klinge calls the trend the “major squishdown.” I just called him to find out what he meant.
“Houses that used to cost $300,000 and $400,000 now cost $100,000 or $200,000,” Klinge said.
So it’s not necessarily just that sales are picking up on the bottom end. Remember that a couple of years ago, prices had appreciated so high that it was nearly impossible to find something in that $300,000-and-below range — part of the reason only 11 houses sold. Now, prices have fallen 31 percent since the peak in November 2005. There are more homes now that are priced at less than $300,000 than there were a year ago.
If you have thoughts on this trend, or want to send me a suggestion or story idea, shoot me an e-mail at firstname.lastname@example.org.