What are the current trends for starter homes & luxury properties?
Recent data on home sales has shown that starter home prices are rising, while luxury properties have started to stagnate.
According to data from Realtor.com, starter homes have been on a continued upswing since 2020, and ended 2022 with a 15% price increase. That trend has continued into the start of 2023.
As far as luxury homes go, the market has definitely cooled off. During the pandemic, home prices across the board went up. Luxury properties have seen a deep decline in appreciation since September 2021.
Metro areas like Salt Lake City, Sacramento, and Houston have seen luxury home prices decline from their three-year peak by double digit percentages. However, starter homes in areas like Nashville, San Diego, and Houston have seen percentage increases for their three-year price change in double digits. In fact, starter homes in Nashville are up over 43% in the past three years.
This appears to be a challenging market for first-time homebuyers in certain areas, but there are always opportunities to look into. Take a look at our first-time homebuyers guide to learn more about strategies that could help you land your first home.
Are mortgage rate buydowns still popular in the current market?
While mortgage rates have come down off their peak, buydowns are still on the rise as home shoppers look to get a break on their rate. In Q4 2022, 73% of home sales in San Diego had a rate buydown of some kind included in the deal. In popular metros like Phoenix, Las Vegas, and Portland, over 60% of home sales had buydowns included.
However, they’re not popular everywhere. The New York, San Jose, and Boston metro areas all saw fewer than 20% of home sales with concessions in Q4 2022.
Do you have questions about how mortgage buydowns work? Check out our detailed buydown article to learn more about mortgage buydowns and how much you can potentially save.
What kind of real estate advice can you get from Chat GPT?
Dan Latu of Business Insider asked ChatGPT a few common questions about real estate and wrote up his experience of the advice he received. He didn’t get expert-level advice, but it did provide basic directions and he felt it would help if he had never researched real estate before. He asked AI tool, “what do you need to buy a house”, and it provided a basic list of eight items that a prospective homebuyer should have or should consider before buying a home.
The other takeaway was that when asked about the future of the real estate market, the tool was fairly limited in its response. ChatGPT only has data through 2021, so it won’t be able to offer even short term recommendations on where the real estate market could go.
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