It’s said that real estate is all about location. However, it isn’t the only thing that influences which way prices are headed or how quickly. Price range also makes a difference; for example, a recent Redfin analysis of current home prices found that homes in affordable price ranges were seeing annual increases much larger than that of more expensive homes.
In fact, the least expensive third of homes sold in June saw year-over-year increases of 8.7 percent, while the most expensive third of homes only saw prices grow by 1.1 percent. That’s no small difference, but it is understandable. Supply and demand are more balanced on the high end of the housing market.
On the other hand, the market for affordable homes currently has more buyers than available homes, which causes prices to rise. Despite this, there is reason for encouragement. Some metro areas actually had a decrease in price for homes on the low end of the market. If the rest of the country follows suit, the gap between the high and low end of the market will narrow.