A studio in DC’s Kalorama neighborhood.
It may come as no surprise to UrbanTurf readers that high demand and increasing prices have resulted in fewer homes being available at entry-level prices. However, a new report shows just how pronounced that lack of inventory is in the DC region.
Trulia’s latest Housing Inventory and Price Watch study reveals that the proportion of starter and “trade-up” homes has diminished nationwide, but in the DC area the percentage of starter homes — homes priced between $0-$280,000 — has fallen approximately 40 percent between the first quarter of 2012 and the first quarter of 2016. During this same four-year stretch, the listing price of starter homes has jumped 37 percent.
“The number of starter homes on the market nationally dropped by 43.6% [over the past four years], while the share of starter homes dropped from 30.2% to 27.7%,” the report stated. “Starter homebuyers today will need to shell out 5.6% more of their income — based on the median income of start-up buyers — towards a home purchase than in 2012.”
The decreasing inventory of starter homes nationwide is likely attributable to the abundance of investors buying homes in this price bracket, while higher prices for “premium homes” push demand for trade-ups. Trulia’s study compared the national housing stock to that of the 100 largest metropolitan areas in the country, from the first quarter of 2012 to the first quarter of 2016. The dip in starter homes is most prevalent in the South and West regions of the country, and decreasing starter home affordability is worst in California.
This article originally published at http://dc.urbanturf.com/articles/blog/percentage_of_starter_homes_in_dc_area_drop_40_percent/11009
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