The lower price ranges are disappearing with far fewer homes available to purchase, and it is impacting the number of affordable closed sales.
Vanishing Lower Ranges-A mind-blowing 29% fewer homes have come on the market below $750,000 so far this year.
For the most part, prices do not remain the same. Over time, just about everything becomes more expensive. After a while, society digests the higher values. Gasoline was $1.12 per gallon back in 2002, compared to $4.20 today. A visit to the Magic Kingdom would set a Mickey Mouse fan back $41 back in 2000, a lot cheaper than the $114 Disneyland ticket this month. In 2010, mouth-watering, sliced bacon was selling for $3.86 per pound versus $5.85 today. Change is inevitable, and so are higher prices.
Housing is definitely not an exception to increasing prices. In the first quarter of 2012, there were 5,553 closed sales below $750,000, 87% of all sales. It was 71% of all sales in 2016, and 51% last year. In 2021, only 41% of all sales were below $750,000 in the first quarter. As home prices have appreciated over the years, the lower price ranges have dwindled and became a smaller percentage of the housing stock. It is not merely the fact that fewer homeowners within these more affordable price ranges have not placed their homes on the market; instead, it has more to do with home values appreciating and surpassing the lower range thresholds. These ranges are vanishing.
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