Where Are The Move Up Buyers?
I walk talking to a colleague a couple of days ago about how the lower end of the market is where all the deals are being done right now. A house under $300K has a significantly better chance of selling than anything above it does. (Of the 41 houses sold in April in Fauquier County, half were below $300K. Another 10 were between $300K and $400K.)
She said that's good, because then the people who sold those houses will move up and so on and so forth. That's how the cycle works. And, I agreed initially. But as we discussed it further it occurred to me that the cycle seems to be broken right now.
There are still quite a few first time home buyers out there, and, an increasing number of investors. Typically the houses they buy are starter homes and then the sellers of those home move up the rung to a larger home.
But almost every home I show these days is empty. And, a large number of them are bank owned or on their way there. There are no owners living in those homes to move up to the next level of home ownership. They've already left and, in most cases, it was to go back to renting.
There are some empty homes where the owners got transferred and are gone because they're buying another home in another community. But a lot of the sales of starter homes are not producing the normal "move up" buyer that we usually see.