To understand today’s complex real estate market, it is critical to have a local, trusted advisor on your side – for more reasons than you may think.
In real estate today, there are essentially three different price points in the market: the starter-home market, the middle-home market, and the premium or luxury market. Each one is unique, and depending on the city, the price point in these categories will vary. For example, a starter or lower-end home in San Francisco, California is much more expensive than almost any other part of the country. Let’s explore what you need to know about each of these tiers.
Starter-Home Market: This market averages around $259,995 in Midlothian, and these homes are typically purchased by first-time home buyers or investors looking to flip them for a profit. Our area currently has 2.5 months of inventory for sale (well below the 6-month supply for a normal market). This means there aren’t enough homes on the lower end of the market for the number of people who want to buy them. A low supply like this generally increases competition, drives bidding wars, and sets up an environment where homes sell above the listing price. According to data from the National Association of Realtors (NAR) on realtor.com,
“The desire for affordability continues to push down the inventory for homes listed for less than $200,000.00.”
Middle-Home Market: This segment is often thought of as the move-up market and averages around $429,000 in Midlothian. Typically, the buyer in this market is moving up to a larger, more custom home with more features, all coming at a higher price. The middle-home market is slightly more balanced than the lower end at 3 months supply inventory, still well on the seller’s market side of things.
Premium & Luxury Home Market: This is the top end of the market around $724,900 in Midlothian, with larger homes that have even more custom features and upgrades. Much like the rest of the nation, this market has a large number of homes for sale and currently shows a 5.6 months supply of homes. In the same realtor.com article, it states year-over-year inventory of homes in this tier across the country has grown by 4.7%, but in Midlothian it’s actually dropped -15% from 6.5 months supply a year ago, and the article indicated the rest of the country may also see declines in inventory at the higher end by February. Today, there are fewer homes available in the premium and luxury space, still slightly favoring sellers but much closer to a neutral market than the middle-home or starter-home groups.
Regardless of the segment of the market and the price point you’re looking at, you’re going to need the advice of a true local market expert. Let’s get together to help you navigate the home-buying or selling process in your market.