Sales of homes under $100,000 fell nearly 18% from March 2013 and those in the $100,000-$250,000 range fell about 10%. But sales of homes over $1 million rose almost 8%, according to supplemental data on the NAR website. The median existing-home price — half were below the median and half above — was $198,500.
The West is seeing the sharpest plunges in sales of lower-priced homes and has been for some time. Compared with a year earlier, March sales of under-$100,000 homes fell 45% in the West, 18% in the Midwest, 16% in the South and only 3% in the Northeast.
What’s behind this trend? Inventories at the lower end of the market are tighter than a couple of years ago as the number of bargain-priced foreclosures and other distressed properties for sale has dwindled. Many of those homes were snapped up by investors, who bid up prices, accelerating that segment’s rebound from the housing bust lows.
This is a continuation of a bifurcated housing market after the economic crisis: people with financial means are able to buy and sell while those at the bottom end with fewer resources and less available inventory can’t do as much. This continued sluggish bottom of the market affects a lot of sectors including employment (whether people have the mobility to chase available jobs), personal finances (plenty of people stuck in homes in which they owe a lot of debt or at the least can’t make any money from), and economic activity and jobs (in construction, real estate, banking, etc.).