It’s April, and you know what that means…
Well, other than “showers that bring flowers” in May…
In many markets, including mine, April means it’s power month for selling real estate. Houses are flying up here. I’ve seen signs go up all over the place that don’t even say “For Sale.” They just say “Sold.”
But unless you have a property on the market or are prepping one to be sold soon, what does this annual bloom in real estate sales mean for you?
Well, one thing you can take away from the data and use is by analyzing the trend in home buyers. By looking at the top buyer profiles in the market, we can anticipate needs for the rest of the year when prepping distressed homes for the retail market and can stage accordingly to target these groups.
Let’s first look at the three largest buyer pools that are purchasing properties right now. When we can assess who is making up the majority of the homebuyer population, we can also see why the demand is so high. REMEMBER: Just because these are currently the largest buyer profiles right now in most markets doesn’t mean they are the ONLY buyer profiles right now in all markets. Doing your own research could mean making more money like Lowel Yoder did! But we’ll get to that below…
Let’s walk through these common demographics that are driving our current market.
This demographic will always and forever be among the top of this list (and just about every other). First-time home buyers are usually the biggest base of buyers on any list at any time. Right now in Portland, Oregon, for instance, 71% of homes being sold are under $350,000, and many of those are “starter homes” for first-timers.
Times have changed over the last couple decades, however, and people, on average, are taking their time before they commit. With new buyers always jumping into the marketplace, looking to start their dreams of affordable homeownership, you can anticipate selling to the oldest of the Millennial generation; people between 31 and 34.
Not to be overlooked for a top-option homebuyer are those looking to simplify and downsize. Once the family is grown, or the mystique of owning a giant house wears off, and the house becomes empty space to maintain, these downsizers seek something new.
These buyers are looking for one level homes or master suites on the main level. They’re selling their big homes and purchasing in the area they’ve always wanted to live in and can now afford to because they’re looking for less square footage. They’re not as concerned with school system ratings but will often look for other neighborhood amenities like walking trails and shopping.
The “downsizer” profile can also mean owners with land who no longer want to maintain it, so they move closer to town with desires for nice landscaping instead.
There are many ways people downsize, but it’s important to note that this buyer profile makes up a percentage of the trend of homes being purchased under $350,000.
This is a big one for us in the Inland Northwest, but it’s true of markets in Oregon, Washington, and states around the continental US. You should keep an eye on your market and speak with an agent to see if this trend is true in your area.
A few notes about relocating buyers, even if they don’t represent the largest profile of buyers in YOUR area. Often, relocated homebuyers have been in your area for a while renting property–either to assure that their job works out first or to put a temporary solution on their housing situation while they get to know the area and decide where they want to live. In other words, just because this demographic hasn’t owned in your area yet doesn’t mean they’re unfamiliar with it.
What does this mean for sellers?
Well, in the Inland Northwest, a lot of people are coming up from California, and they’re bringing their California money with them, driving up both the housing demand and pricing. For you, it could look different. But it’s worth keeping an eye on. For instance, Lowel Yoder recently sold a house that he flipped in Oregon. It sat on the market longer than he was comfortable with, but he had been keeping an eye on the trends in the area, knowing that Amazon was hiring in the larger town outside of the community his property was in. Lowel anticipated that one of the thousands of people Amazon hired would want to buy his neighborhood outside of Salem Oregon, and so he held firm to his asking price and got it.
To read more of this story, <CLICK HERE>
For you, it’s important to understand what draws people to your area. Jobs? Better lifestyle? Are there people coming in from other countries (the Pacific coast and the Northeast hold strong as landing grounds for people coming in from overseas)? Or perhaps they’re drawn to your wide-open spaces and land-ownership opportunities.
With so many factors that attribute to these trends–from interest rates to unemployment to complete market shifts–it can be a full-time job just keeping up with it. Don’t neglect your business, your properties, or your education in favor of watching trends, but do keep them in mind when preparing your properties for sale.
If you have any questions about your market, ask your trusted local agent.
Have a deal under contract that you would like a quote on so you can flip a property and take advantage of this retail market? Let us know! You can fill out a quick questionnaire at CogoCapital.com to receive a rate quote via email or you can call us anytime at (800) 747-1104 to talk to a loan officer. With millions deployed and millions to deploy, we want you to get the capital you need for your real estate investing.
To Your Success;
Lee A. Arnold
The Lee Arnold System of Real Estate Investing