More than 70 percent of the U.S. housing stock was built prior to 1990, and an aging housing stock may present more opportunities for buyers searching for a bargain, according to RealtyTrac’s Aging Homes Analysis.
“The high percentage of homes that are at least 20 years old and likely in need of some major repairs is eye-opening,” says Jake Adger, chief economist at RealtyTrac. “However, given the low inventory of homes available for sale in today’s market, this challenge of aging U.S. housing supply can also be an opportunity for buyers looking for a bargain and home owners looking to update their living space and improve the value of their homes.”
Older homes often need upgrades for energy efficiency and may lack floor plans or amenities that home buyers desire today, according to RealtyTrac’s analysis.
On average, homes built prior to 1990 sold for $233,211 this year, compared to $256,292 for newer homes.
“The lower price point on older homes is not surprising given many are in need of some rehab and are more likely to have maintenance issues,” Adger says. “But this also presents an opportunity for buyers willing to take on that older inventory. Those buyers can purchase at lower price points and face less competition from institutional investors,” who tend to buy newer homes.
Fourteen states were found to have the largest number of homes built prior to 1990 (making up more than 80 percent of its home sales). Nearly all of those states were located in the Northeast, except for Louisiana, New Mexico, and Kentucky, RealtyTrac notes.
Meanwhile, older homes made up less than 40 percent of sales in Utah and Nevada.
Source: “Aging Housing Inventory Presents Bargain-Hunting Opportunities,” Mortgage News Daily (Oct. 31, 2013)