Where Is Your Next Buyer Hiding?

Tomorrow’s Home Buyers? Check the Basement.

The housing market needs an influx of new buyers.  Don’t hold your breath waiting for today’s new college grads to get house hunger any time soon They simply can’t afford it, considering that their starting salaries are about 10% less than that of the last few classes.

What about young families, the classic first-time buyer demographic? Many millennials are still living in their parents’ basements, and household formation has been weak. But one analysis says that the problem isn’t as much the buyers lingering in the shadows. It’s that the shadow buyers are overshadowed by the still-growing number of foreclosures lingering just off stage.  As new buyers ease into the market, those foreclosed houses will enter the market even faster. Supply will continue to outstrip demand for the foreseeable future.

Not a pretty scenario. Which is why we recommend that you track local pricing trends so you understand the demographics, job growth and housing trends in your own neighborhood. Start with the ForSaleByOwner.com Pricing Guide. Decide which factors are most likely to affect demand, and prices for houses in your area. The more facts you have, the less you will fear what’s lurking in the shadows.

Image courtesy  of Morguefile contributor ktambler.

Second Chance for First Time Buyers?

Rents are rising by as much as 10% in some cities.

Mortgage rates are still low. And, as the latest reports indicate, the housing market is worried about how this spring’s market will unfold, in that prices are soft and demand…who knows yet?

Is this a set-up for a resurgence of first-time buyers?

First-timers are facing a fresh raft of barriers:

• Lenders are demanding higher down payments 
• Condo deals can be shaky, if the building has too many rentals. (Too many rentals complicate lending through Fannie Mae and Freddie Mac.)  
• 10% of house deals (or more) fall apart because the appraisal comes in too low  
• Cash buyers – i.e., investors – dominate in many markets. First-time buyers can’t trump a cash offer

But, first-timers also have a surprising advantage: many municipalities have put into place temporary programs to incent first-time buyers to make the move this year. We’ve noticed such programs in Florida, Georgia, and North Carolina. To find a program in your state or city, Google “first time buyer” + program + [your city or state]. The results should flush out any relevant programs.

Don’t overlook live-near-work programs sponsored by your employer, either. And to get the big picture and the details about buying your first house at the ForSaleByOwner.com First-time Buyer’s Guide.