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“Trading Up” Not so Easy in These 10 Cities

HomeownershipTrading up from your starter home is a difficult task for some homeowners across the nation according to a new study from Realtor.com. The results found high prices and low inventory are keeping certain buyers in their starter home for life. Though many are able to sell their home for asking price or higher, when it comes to buying a new home, the same rules apply. In this tight market, it is hard to buy “better”.

"In today’s competitive landscape, moving up from [starter homes] to the white picket fence has become increasingly tough," Javier Vivas, Manager of Realtor.com’s economic research team said. "This isn't particularly unhealthy for the market, since it stops some irrational buyers, but it can leave out a large crowd of buyers who are financially ready."

Realtor.com ranked the 100 largest U.S. metros by seven criteria: affordability of trade up homes, price gap between starter and trade-up homes, price increase of trade-up homes since 2014, dwindling supply of trade-up homes since 2014, percentage of homes with negative equity, days on the market, and percentage of households that have lived in the same home for more than eight years.

The top 10 markets where it is hardest to “trade up” include Palm Bay, Florida; Omaha, Nebraska; Detroit, Michigan; Honolulu, Hawaii; Seattle, Washington; Tucson, Arizona; San Jose, California; Dallas, Texas; Sacramento, California; and Atlanta, Georgia.

According to the National Association of Realtors (NAR), only 42 percent of move-up buyers got back into the market in 2015, down from 55 percent in 2003.

Realtor.com reported there are a number of factors the study cites as causing the drop in repeat buyers across the nation. New home construction still has not caught up with demand, there is a strong competition from investors and foreign buyers who can pay in cash, and buyers have not recovered enough equity in their homes since the housing crash to finance a more expensive mortgage. According to Realtor.com, current home prices have recovered only 80 percent of their pre-recession peak value.

For detailed information on the top 10 markets, click here.

About Author: Brianna Gilpin

Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation's leading diversified media and information services companies. To contact Gilpin, email [email protected].
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