Welcome to Traverse City Area Real Estate Sign in | Help

Traverse City Real Estate Blog

Traverse City Real Estate Blog, Traverse City real estate information, Traverse City area events and information, real estate market information

Archives

First-time Home Buyers Face Greater Competition
-->

First-time home buyers are playing a larger role in the housing market, but they’re finding big changes.

Thirty-nine percent of home sales nationwide were from first-time home buyers during the 12-month period ending June 2012, according to the National Association of REALTORS®. That's up from 37 percent a year earlier.

But while first-time home buyers once had a huge inventory of homes to choose from, now they’re finding tightened supplies and steeper competition for what’s left.

Housing inventories are hovering at record lows in many markets, limiting supply. First-time home buyers face increased competition from investors, who are often trying to snatch up the same bargain-priced housing deals. Investors often make all-cash offers, too, which makes it difficult for buyers requiring financing to compete against them. Also, banks have tightened up their underwriting standards, creating more hoops in just qualifying for financing.

It’s not easy to be a first-time home buyer, some say. But first-time home buyers are critical to a healthy housing market. They allow existing home owners to sell and trade up into larger homes.

To respond to the changing housing market, first-time home buyers may need to broaden their search and be more “flexible and compromise,” says Chip Rowand, a Broward County, Fla., real estate professional.

Also, first-timers shouldn’t automatically settle for a Federal Housing Administration mortgage due to the low down payment requirements (usually 3.5 percent of the purchase price). The FHA can have several restrictions that makes some sellers prefer buyers who offer cash or who are using conventional loans, says Stephen B. McWilliam, president of Greater Fort Lauderdale (Fla.) REALTORS®. Some conventional loans require just 5 percent down and so may serve as an option for first-timers.

First-timers also need to be able to act fast and be able to have their financing processed quickly if they are going to stay competitive. Some banks won’t sign off on mortgages for eight to 12 weeks. But some sellers won’t wait that long. Some housing experts suggest first-timers look into working with a community bank or local mortgage banker, which often don’t have as long a wait.

Source: “First-time Home Buyers May Have to Compromise,” Sun Sentinel (Jan. 10, 2013)

Here is Traverse City, Michigan area inventory levels are also down, values are increasing and average sales price was up over 14% for 2012. Interest rates are still extremely low....if you are a buyer, first time or not, NOW is the time to act before values rise further. For lower price point / first time buyers it is increasing difficult to find homes under $150,000.

Contact Jon Becker if you are considering Traverse City real estate anytime!!

Jon Becker - Century 21 Northland

ABR, Green, SFR, Quality Service Award

jon@c21jb.com

231-342-5401

www.c21jb.com for all Traverse City area real estate listings & information

Posted: Tuesday, January 15, 2013 11:40 AM by Jon Becker

Comments

No Comments

Leave a Comment

(required)

(required)

(optional)

(required)

Comment Notification

Subscribe to this post's comments using RSS