The type of home you're shopping for may determine how much competition you face from other home buyers this spring, according to one new analysis. The analysis split the housing market into three tiers based on price.
What it found was the bottom third of the housing market is much more competitive than the middle and top tiers. That means, entry-level home buyers are more likely to find themselves in a bidding war than buyers of more expensive homes. The effect can be seen in recent home price increases. The most expensive houses have seen prices fall 1 percent over the past year, while the least expensive homes have seen an 8 percent increase.
Why is there such a big difference? There are fewer affordable homes available for sale. Since last year, the available inventory of upper-tier homes has risen 13 percent. By comparison, there was only a 1 percent increase in entry-level homes for sale.
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