Today’s challenge for buyers

Castles in the Sand

There’s a big predicament out there all over the country for home buyers, especially first-time buyers. There’s nothing to buy and, apparently, it’s my generation’s fault.

United States homeowners are staying in their homes much longer than ever. Nationwide, homeowners are remaining in their homes typically 13 years, which is five years longer than they did in 2010, according to Redfin. This fact is keeping the housing inventory low resulting in low sales statistics month after month. Except for the early part of this year, the inventory of homes for sale is now near the lowest level in 37 years of record-keeping, according to the housing data firm CoreLogic, Inc.

You don’t have to be an economist and expert in the housing market to understand that when owners don’t trade up to a larger home for a growing family or downsize when children leave it there are availability consequences. When this happens, which is rapidly becoming a fact, it puts a cap on the number of homes available for buyers either looking to upgrade or just coming into the market.

The baby boomer generation, who are now entering their seventies, is partly to blame for the lack of inventory since many of them are staying healthier later in life, are more active and don’t see any reason to downsize. Some states make it easier for seniors to stay in their homes with generous tax benefits. In most states, once you move you lose that benefit which only encourages senior homeowners to stay put.

In Manatee County, however, there is a program for homesteaded residents that allows homeowners to move to a new home and retain some of the tax benefits of the original home. This is called portability and it gives you the ability to transfer the “Save Our Homes” cap to a new home. The “Save Our Homes” cap is the difference between your market value and assessed value. For example, if the just value of your new homestead property is more than the just value of your old homestead, you will be able to transfer your cap up to the $500,000 limit. This went into effect on January 1, 2008, and allows you two years to make the application for portability. In addition, there is no limit on the number of times you move and apply for portability.

October sales statists from the Realtor Association of Sarasota and Manatee is showing a similar trend in inventory. Here are the numbers.

Both Manatee and Sarasota counties continue the upward drift in sales prices with Manatee doing a little better. The number of closed single-family homes in Manatee County increased by 5% compared to last October. The median sale price for single-family is $325,000, up 9.1% from last year and the average is $396,342, up 7.4%. Sarasota’s single-family median sale prices increased by 5.6% to $285,000 and their average sales price increased by 12.5% to $385,131.

Condos in Manatee County closed 0.5% fewer sales, however, the median sale price increased 0.9% from last October to $192,999 and the average sale price increased 20.2% to $262,724. Sarasota’s condo median sale price decreased 5.7% to $220,352 and their average also decreased by 0.9% to $297,501.

Inventory of available properties continued to drop in Manatee County to a 3.4 months supply for single-family homes and 3.7% for condos, putting additional pressure on the market. Who knows what the inventory future holds and the effect it will have on the upcoming selling season? In the meantime, buyers are just waiting and waiting and blaming their parents and grandparents. Happy Thanksgiving!

More Castles in the Sand:

Mythical credit scores

When did $100,000 not become enough?

Are condos the future of housing?