Great article in SFGate featuring a local family we know who are part of a shrinking group – those homeowners who are able to “move-up” to a larger or nicer home. They have always been a part of a vibrant housing market because they provide supply in the home they are leaving and demand in the home they are looking to buy. Why is the move-up buyer becoming less common these days? Here are a couple of the reasons why…
The two largest groups of home buyers right now are investors and first time home buyers. Neither of these groups leave a home behind to add to the supply; they only add to the demand.
And even though home values seem to have stabilized somewhat and perhaps even increased a little in some areas, there are still millions of homeowners who are “underwater”, meaning their mortgage balance is more than the value of their home. They are basically stuck for now, having to either wait the market out of try to get relief from their bank to sell the home for less than the mortgage owed.
Either way, this is another great example of why we don’t have the inventory right now to keep up with demand. The entire article can be found at the link below.