In the Proverbs of King Solemn, old age represented the crowing glory of a life well lived and blessed by God, the result of wisdom and just dealings with others. Today, too, some things get better with age – and new research suggests that’s true for houses too, as sales of older homes are boosting the housing recovery in markets around the country.
According to a new report front UPI Business News, the real estate research company RealtyTrac’s latest Aging Homes Analysis reveals that of 2013 home sales to date, over half involved homes built before 1990. And in a number of states across the country, including New Mexico, New Jersey, Illinois and Connecticut, at least 80 percent of home sales involved those older houses.
As the RealtyTrac report points out, age is relative. An “older” home can be anything from a suburban tract house constructed in 1985 to a farmhouse dating to the 1890s. Often overlooked as investments or dwellings because of their age, these aging homes often languish on the market until they end up on auction available for nearly nothing to the highest bidder.
Although many of these older houses wind up on the market as foreclosures, not all of them do. Some are part of estate sales, offered for a quick sale by family members of the deceased. Others may be abandoned, or simply put up for sale because the owner is buying a newer home.
What’s driving the demand? These aging houses are cheap, and often available for cash at auction or by arrangement with the seller – usually a bank or other financial institution. Down payments may be small, too, putting these houses within reach of lower-income buyers.
Seen as less desirable, older homes are also often overlooked by buyers in search of newer houses with more amenities. And in a housing market that’s heating up, where prices are rising and newer homes are in high demeaned, there’s less competition for those older properties.
Vintage houses aren’t without their drawbacks, though. Many are in need of major repairs that can end up swallowing the savings made on the purchase. Houses bought at auction are sold as-is, leaving the buyer with an attractively cheap property and serious flaws. Some are in less-desirable older neighborhoods, or rural areas that might make them harder to rent.
Still, in a surging market where demand for homes now outstrips the supply in some areas, and median home prices have been steadily rising as the housing outlook improves, older homes represent an often-overlooked opportunity, especially for investors looking to diversify their holdings, as Jason Hartman recommends.
Repaired and refurbished, older homes often have a retro charm not seen in newer houses – an asset that’s helpful for renting or even for resale. And with tax breaks for those kinds of needed fix-ups and a growing demand for quality rental housing, these well-seasoned houses may be worth a second look. (Top image:Flickr/wonderlane)
“Aging Homes Is an Eye-Opening Market, RealtyTrac Says,” UPI Business News. UPI.com. 31 Oct 2013
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