Properties Owned For Longer Periods

Given the shortage of homes for sale, sky-high home values, and older homeowners’ growing desires to age in place, the average tenure of home ownership has been increasing over the last few years. This will likely continue – especially if buyers made purchases in the last two years and are locked into low interest rates. It is unlikely that they would trade these homes for higher priced ones unless there was a major life impact.

“The replacement value is something that people are thinking about now,” said Ardel McKenna of the Dawn McKenna Group, affiliated with Coldwell Banker Realty in Naples, Florida. “If they had to replace today what they had bought two years ago, they would have to pay twice as much or they would get less. People are not going to move unless they are dead-set on switching locations or they’ve had a significant life event. One of the main reasons why inventory levels aren’t rising much is that sellers often don’t have a parallel move.”

As for those who are planning to purchase over the next few years, they are not making short-term decisions either – which could also lead to longer periods of home ownership tenure. For the wealthy who don’t need to sell, they may see opportunity in the market for building up their real estate portfolios.

Some real estate insiders expect that a fair number of these homes will eventually become inheritance or legacy properties, providing families with a lifestyle continuum should they ever need to shelter in place again.