An Article in the The Realtor Magazine - March 25, 2019.
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Baby boomers and retirees who had built supersized homes may find it tougher to sell them. And that’s prompting sellers to consider some deep price cuts to try to attract more buyers.
About 15 years ago, many retirees rushed to build high-end, five- or six-bedroom houses in warm climates, encouraged by easy access to credit and a housing boom. But keeping up with maintenance requirements of these homes can be challenging as they age. In addition, younger home buyers aren’t showing a high desire for these “McMansions,” instead showing a preference for smaller, more modern-looking homes that are less expensive, The Wall Street Journal reports.
For example, in North Carolina’s Buncombe County, about 34 homes priced more than $2 million are on the market, but only 16 percent sold in that price range in the past year, Marilyn Wright, a real estate professional with Premier Sotheby’s International Realty in Asheville, N.C., told The Wall Street Journal. In Scottsdale, Ariz., about 349 homes asking $3 million or more are on the market as of Feb. 1. But homes that were built before 2012 are being offered at steep discounts, even up to 50 percent, real estate pros report.
As more baby boomers advance into their 70s and 80s, they may be more pressed to sell, and the swell of larger homes could worsen, some housing experts say.
“You had this wave of homes built that now just don’t make sense for a lot of the people who bought them,” Rick Palacious Jr. of John Burns Real Estate Consulting told The Wall Street Journal. Baby boomers currently own 32 million homes across the country.
Nearly half of home buyers this spring say they’re looking for homes priced at or under $200,000, the segment of the housing market that has seen the largest year-over-year declines in inventory, according to a recent survey by realtor.com®, based on responses from about 1,000 buyers who plan to purchase a home in the next 12 months. On the other hand, only 6 percent of spring shoppers say they’re looking for a home at or above $750,000, the price range that has seen the largest increase in inventories since last year, according to the study.