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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-home, market. Each one is unique, and depending on your location, the price point in these categories will vary. Here’s what you need to know about each of these tiers before you get ready to buy a home.
This segment is often thought of as the move-up market. Typically, the buyer in this market is moving into a larger, more custom home with more features, all coming at a higher price. Across the country, this market is looking more balanced than the lower or starter-end and is leaning toward a seller’s market.
This market varies by price, and these homes are typically purchased by first-time homebuyers or investors looking to flip them for a profit. Across the country, there is currently less than a 6-month supply of inventory for sale in this segment. In fact, according to the National Association of Realtors (NAR), in January, inventory reached the lowest supply level recorded since 1999. That 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. This is a seller’s market.
This is the higher-end of the market with larger homes that have even more custom features and upgrades. Nationwide, there are more homes available in the premium and luxury space, creating more of a buyer’s market in this specific segment.
Nationwide, prices are forecasted to increase across all three of these price points in 2020. The map to the right shows the latest projections from CoreLogic.
With today’s inventory, selling your starter home now and moving up to the home of your dreams may be your best move yet. Rates are at an all time low and inventory is becoming limited.