But where would I go?

That’s the big question. A recent Redfin survey found Forty-five percent of more than 1,700 home owners say they are planning to sell, but the majority of them aren’t sure when they will list. Concern over finding a replacement home is the top reason for their indecision.

Many of those would-be sellers want to upgrade their home, but are concerned that they won’t be able to find what they want. Many others are in the Baby Boomer generation and are ready to downsize, but they have similar concerns.

The issue of home owners synchronizing a sell and a buy has been around forever; however, recently the “tight” market, with lower than historically normal inventory as exacerbated this issue. Add to that the uncertainty of new mortgage requirements that when into effect in 2014 and it’s no wonder that confusion and concern reign.

The new mortgage rules were created by the Consumer Financial Protection Bureau and were mandated under the Dodd-Frank Act to ban many of the practices that led to the housing bubble burst in 2008. The mortgage process has become much more cumbersome and has stretched out the timetable between the acceptance of an offer and the closing by 15-30 days.

The slow recovery from the “Great Recession” has added to the problem by helping to stall out certain price bands in the real estate spectrum. The low-end of the market (starter homes, perhaps up to $200K) has been robust, due in part to the pent up demand for starter homes following the recession. The issue has been in the middle of the market, from $200K to $400K, which is historically the “move-up” market. Lack of certainty about the future and a lack of inventory of even larger homes has caused this segment to stall on their normal move-up plans. As they have stood pat in their homes they have caused an inventory shortage problem for the buyers right below then who would otherwise be looking to move up from their starter homes.

A good deal of the problem above the mid-market has been caused by Baby boomers, sitting on their McMansions (in the $400-600K range) well past when they were expected to retire and downsize. Many have discovered that they didn’t plan and save well enough to retire, so they are holding off those retirements. Others had such leveraged positions in their McMansions that they now discover that they can't get out from under them and have enough left to buy that retirement home that they has dreamed about. Still others are OK on their current home, but just don’t see clearly where they would move to if they downsized. The overall effect has been to stall out that move-up segment of the market due to a lack of inventory from these reluctant Baby Boomer sellers.

The home building industry also contributed to the problem by almost going dormant during the recession. Many sold off their lot inventories and quite a few failed or got out of the business. Those who rode out the bad time have discovered that so many workers got out of the building trades industry that there is now a shortage (severe in some areas) of skilled construction workers. What that has resulted in is a building industry that has been unable to fill in the space left by the inventory shortage, especially in the downsizing price bands that the Baby Boomers are looking into. Pretty much across the board, from single family homes to condos to apartments; there is a shortage of new builds, when compared to the market demand.

So what’s the would-be downsizing buyer or the move-up buyer to do? Where would they go? The key in this market, more than ever, is to be working with a good Realtor®. There are places out there for you. They are just harder to find and many of them will require some compromise on your part. Buyers in those classifications often come with long lists of “must haves”. Many of those expectations may not be realistic with in the constraints of other criteria. Sometimes those must have lists form the basis for buyers searches on Zillow or other real estate sites and they miss many homes that might have worked. That’s why they need a Realtor

A good Realtor will work with you and will do the necessary vetting of potential properties to find you a few good candidates. He/she will also figure out which of your criteria are really “must haves” and which are “nice to haves”. He/she will insist that you go see some houses that don’t seem to fit all of your criteria, because they know that a home with enough positive selling points will overcome a few objections. They will also be able to point out the other, “life-style” issue about a particular area that may help you overlook a few things that need to be changed later. Good Realtors don’t interject themselves into the buying decisions; they just make the choices while looking better and the process of buying easier and smoother.

So the best answer to the question, “Where would I go?’ is to start by gong and finding yourself a good Realtor first. You’ll be glad you did. You’ll find the right new home faster and get through the buying process easier with a Realtor as your guide. Your new home is waiting out there and your Realtor will help you find it.