One of the most surefire signs of recovery is the presence of younger, first-time home buyers on the real estate market. With rising student debt and property prices in many markets, millennial home buyers have continually been priced out of the market in the years since the Great Recession. Lately, a few factors have been working to bring this demographic back to the real estate market, making for what could be a very good year for home buyers and sellers.
The perfect storm that was once working to keep millennials out of the home market has now shifted to allow for a substantial uptick in this demographic’s market activity level. Low mortgage interest rates, eased credit requirements and rising rents have created a more hospitable environment for owning than renting and according to real estate resources, such as Redfin, millennials are coming back in droves.
Redfin reported to the Los Angeles Times that first-time home buyers accounted for 57 percent of home tours by mid January. This is 27 percent higher than the same time period from last year and the highest rate seen in recent years.
“I think it is significant,” Redfin chief economist Nela Richardson said to the Los Angeles Times. “They are sticking a toe in the water.”
According to The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey first-time home buyers accounted for 36.3 percent of the buying population in December. After dipping dramatically in 2013 and early 2014, it seems first timers are inching back up to their typical 38 to 40 percent level.
Del Mar Luxury Home Buyers Find Eased Price Gains
While first-time home buyers typically aren’t an influential force on the luxury home market, their increased presence is making for a healthier overall market. These healthy conditions have been reflected in Southern California’s luxury markets such as Del Mar.
Altos Research, a California-based real estate analytics company, reports home prices have been downgrading in Del Mar, giving home buyers who come to the market a little early in the season a chance at some great deals. The current median single-family home value in Del Mar is $1,975,962. This value has downgraded from it’s high point noted back in August of about $2.15 million.
With demand edging up, it’s likely that home prices may start to climb, especially as more buyers come to the market in the spring months. Altos measures supply and demand levels through a unique indicator known as the Market Action Index. This value uses a scale with 30 as a neutral value to indicate buyer favor with low values and seller favor with high values.
The current MAI of 34.58 shows a seller favor in Del Mar, but not by a significant amount. With inventory still on a downward trend, this value could start to indicate an increased demand as buyers outnumber the amount of homes for sale. There are currently about 82 homes listed on the market.
If you are interested in learning more about the exquisite luxury homes in Del Mar, please contact our team of property experts today.