Most agents count on the commissions from first-time homeowners who move on to bigger and more expensive houses. But for a new generation of homeowners and their agents, the time of automatic up-sizing is over.
It’s a bad situation for homeowners and it takes away real income from agents.
How bad is it? According to a story in the Sacramento Bee:
Andrew LePage, an analyst with San Diego-based real estate information firm DataQuick, said the lack of move-up buyers can easily be detected by looking at what’s happened to sales of homes in the $250,000-to-$600,000 range.
In 2006-07, when the local market was near its peak, that segment accounted for 70 percent to 80 percent of all sales in the Sacramento region, according to DataQuick. These days, homes in that price range account for less than 19 percent.
Traditional move-up neighborhoods are seeing much less activity. In some traditional second-home neighborhoods, sales volume today is 36 percent below the 10-year average, according to LePage.
This is happening throughout the state and country. As homeowners suffer, agents suffer. For homeowners who bought in the last few years, the lack of equity will keep them stuck in their current homes. And with those homeowners staying put, agents are losing out on a valuable slice of the real estate pie.