How Long Do Most People Live in a House Before Selling?
How Long Do Most People Live in a House Before Selling?December 11th, 2018
That depends on where you live. San Diego is drastically different than the national average when it comes to how long people live in their house before selling.
The national average increased from 6 years to 10 years living in a home
The National Association of Realtors (NAR) keeps historical data on many aspects of homeownership. One of their data points, which has changed dramatically, is the median tenure of a family in a home, meaning how long a family stays in a home prior to moving.
As the graph below shows, over the last twenty years (1985-2008), the median tenure averaged exactly six years. However, since 2014, that average is almost ten years – an increase of almost 50%.
San Diego Market
How does San Diego compare to the national average? I researched 1,821 of the closest homes in my area and here is what I found.
Of the 1,821 homes:
- The median # of years in a home was 21 years
- 78% had been in their homes for 10 years+
- 45% were original homeowners
- The median year homes were built was 1992 (26 years ago)
Why the dramatic increase?
The fall in home prices during the housing crisis left many homeowners in a negative equity situation where their home was worth less than their mortgage. They were either unable to sell or wanted to regain or build more equity and therefore stayed in their homes longer. Also, the uncertainty of the economy made some homeowners much more fiscally conservative about making a move.
In San Diego, there are some additional factors:
- The lack of inventory caused many homeowners to stay in their homes longer than planned. Because of the low inventory, home prices rose quickly or they either couldn’t find a home that suited their needs.
- Property taxes in California cause a “lock-in effect”. Under Prop. 13, many homeowners get hit with a substantial property tax increase when they buy a new home. Many choose to stay or rent out their home to retain their low property tax base.
- Shortfalls in new home construction further reduce inventory for people to find a home and make a move.
What does this mean for housing?
Many believe that a large portion of homeowners are not in a house that is best for their current family circumstance. They could be baby boomers living in an empty, four-bedroom house, or a millennial couple planning to start a family that currently lives in a one-bedroom condo.
These homeowners are ready to make a move. Since the lack of housing inventory is a major challenge in the current housing market, this could be great news.