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1st Time Buyers Take the Plunge in Record Numbers

February Home Sales numbers were released yesterday from NAR ( National Association of REALTORS) about the great increase in sales, mostly by 1st time home Buyers taking advantage of the lower priced Bank Owned properties and short sales.

While all that is certainly encouraging there might be a bit more to the story. It occurs to me that most often , 1st time home buyers are younger and many times assisted by family. But why all of a sudden is this happening, when we hear that the greatly reduced homes prices may still have some room to fall more.

I am going to suggest that there is a public mind change or at least an attitude change taking place. It may be wishful thinking, but the change in attitude , as we have seen before can literally move mountains markets.

Yesterday morning I received a call from a young women that I have known since she was a teenager. Her mother is a good friend and past client, having represented her in a number of transactions over the years.

This young women , now in her early 30’s , married with 3 children called me and said her mother had said with the change in the market, it was time for her and her husband to purchase their first home. She said the caveat was that first she needed to talk with me and If I agreed, I should refer the real estate agent and that she and her husband should get busy and begin the buying process.

I haven’t seen to this young women in perhaps 4 or 5 years. We went over their personal circumstances, discussed the market and I concurred that done correctly , she should be able to take good advantage of the current market.

During the discussion, she had recanted my frequent conversations with her mother about the market and what the real opportunities were. She reminded me of a recent discussion that I had with her mother about our area showing signs of bottoming out and that other areas were already making some recovery.

This young women’s husband and family are secure in his employment and they have been waiting for quite some time ,saving up the needed down payment and they wanted to be ready when the market indicated it was the right time.

I recommended that she contact our own ActiveRain mortgage professional , Brian Brady with World Wide Mortgage to get pre-approved for the financing. She said she had met this really nice real estate agent in her community and said her mother believed I should refer the agent for her and her husband but she asked if it would be OK to use this person she knew. She told me all about him and that he even reminded her of me in that he had given her reliable council about waiting till the time was right and kept in touch with her over the years about their market.

I suggested that instead of me referring someone else, that she contact him at once and set up an agreement where he would represent her exclusively. Seemed to me that those good established relationships should be prized and respected.

So what has really changed that is bringing these Buyers to the market place. May I suggest that parents and family( many of our past clients) that are reading our blogs, newsletters, and believing in our counsel that we are at or approaching the near bottom of the housing market. They are being influenced by our more positive message to those neighbors and our sphere of influence as we begin to see some light at the end of the tunnel. And the REO’s and short sales are still out there and soon to be in record numbers. They read about the tax credits, they factor in our discussions of the financial assistance that is out there and I believe they want to believe that we are going to get through this and I further believe they want to on the first rung of the prices that will begin to heal our housing markets.

Now this is of course my own myopic view of what is most likely influencing many of these first time Home Buyers and our professional efforts are now beginning to show up in the statistics.

Those of us that love what we do, have always wanted what is best for our friends and clients and it looks like we are beginning to make an impact on the beginning changes to heal the nation’s nightmare. And I won’t for a minute sell ourselves as professionals short. My clients do listen to me because they know that I care and would always give them the best that I have to offer. And multitudes of others feel the same way about their own real estate professional that influences their decision by always giving them the best information they have. Taken all together, we are doing our part in this healing process.

Editor Note: There is an interesting article today March 25th, about the possible bottoming out of the housing market in CNN Money.

Posted by San Diego Real Estate Voice authored by William Johnson on 03/24/2009 10:49 AM

Comments (48)

Record Home Sales in February Reported in the ActiveRain Channel

nar, national association of realtors, first time buyers, activerain, brian brady, world wide mortgage

Post is included in group: Real Estate Trends
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Post is included in group: Diary of a Realtor
Post is included in group: 1st Time Buyers

48 Comments on 1st Time Buyers Take the Plunge in Record Numbers

MAR

I'm glad your coming to some conclusions because I've just about given up trying to read new buyers in our market.

Also, I don't trust the stats from NAR. I want to know that they are publishing closed transaction, not including pendings.

My information about the NAR stats this week included large transactions for multi-family buildings.

My Dear William - You are such an integrous man. It is such a joy to read your posts. You are one of the shining examples of professionalism in real estate. Great counseling for your client's daughter. Your statement "Those of us that love what we do, have always wanted what is best for our friends and clients and it looks like we are beginning to make an impact on the beginning changes to heal the nation's nightmare." really resonated with me. Proof of who you are and like you, I am hopeful that we are seeing the bottom or at least a glimpse of it. Like you, I look forward to healing.

All the best my friend,

Marlene

William--I would have done the exact same thing. There is no reason to put a wrench into someone's plans when they have found a good agent by pushing to refer someone else. I don't need the referral fee as much as I would like my client to be happy. If they found someone they want to work with, that is good enough for me. You are a good person and give great advice.

Good Morning Lenn, I understand how you feel, we are all more than a little frustrated in trying to understand the daily changes in numbers, proposals and all the noise in the economic shifts and tales of all what is being said and who is saying it.

I also believe that NAR has our back in this and maybe they are including or excluding things but I still believe that they feel their main purpose is to correct or edify the media distortions that the media is famous for.

Not all that much of anything is totally reliable today but we have and you have have specifically always tried to put an honest light and to at least try to see the glass as half full ( even if we are not measuring every drop in the glass to verify that it is half full and not over half empty). We want good things to happen in our communities with our clients, the new Buyers, our economies , we all want it to be the best that things can be wherever there is even a tint of a positive light.

My perspective or vision is no more clear than any one else but I am hopeful ( even against the odds that might point otherwise) to see whatever positive I can and focus there. You do the same of course and do it so well.

Good Morning Marlene, you are so wonderful for saying those things. Thank you for always encouraging me to be the best than I can be no matter the market, no matter the issue, no mater where economic trouble or misunderstanding takes us. You have this unmistakable kindness that also says so much about who you are as a professional and as a friend. Any person that could have had you for a friend, a Mom, a partner, associate or even employer/employee, would be a person that is self actualized as a gracious, kind, responsible and loving human being and would also know great success in their lives because you teach by example. I am so delighted and proud to cal you my friend Marlene!

Hi Teri, Many Thanks for commenting. I think some might have done otherwise but we know the right thing to do and that way , life never fills our lives with regrets. Besides, if the situation were reversed, we would like to think..... but that really can never be the guiding force. Over this next year , I will list and sell a least 2 or 3 more properties for this family and integrity has to rule my life, no matter what the rest of the world does. You and I and so many other wonderful professionals are on the same page. And what is really cool is that we know who each other is. And so do our clients.

Hi William, yes your integrity is shining through on this post. I do hope we are getting close to a bottom with this market, then nowhere else to go but UP!!

"I suggested that instead of me referring someone else, that she contact him at once and set up an agreement where he would represent her exclusively. Seemed to me that those good established relationships should be prized and respected."

Sir William: You, my frend, are a class act!

I ditto Rich:) Also, I do think the $8000 credit and low interest rates are getting first-time buyers off of the fence. I am experiencing it myself so you have some additional evidence!

Hi Gary, One of things I love most about this industry are some of the amazing and fabulous people in it that love it so much not just because they make a living from it but because they know they make a difference. No different for me and I am nothing any more special that most of the professionals that I know, like you and many others. We are the best of this industry and frankly there are lots and lots of us. But I know what you mean and surely I don't mind taking a bow once in a while for doing the right thing with the caveat that I am just one of so many that are worthwhile for our consumers because we love what we do. Diane Aurit made a comment just below Rich's really neat comment and she and he are yet more example of others that make such a difference in our industry as well as our friendships. Passion and care run through all of our veins and I have always said that I am so proud of what our "R" stands for and the many sacrifices that so many made to get here. It does sadden me to know that many of our colleagues have been and are suffering and all we can do is try to help them every way we can. At ActiveRain at least, that is the standard, not the exception. Helping others to succeed. Being prideful of our profession is also helpful because it keeps us looking to the positive instead of the other ways that things can be preceived. Many Thanks Gary for taking the time to express it again to me and you already how proud I am to be associated here in the Rain with some fabulous and remarkable people like yourself.

Hi Rich, What a wonderful comment,Thank You so very much. Please know that those words will never be wasted as being a class act requires an all the time approach to life and not a some times event. Beside it takes being a class act to ever recognize another one. Kudos to you Sir, as well!

Hi Diane, I think the tax credits and well as the change in what people are seeing and reading is all having a good influence. And I don't sell short the change in weather either as we enter Spring and all things that were bleak and cold are brightened and warmed by the Sun .Life begins anew and with it new possibilities can become the replacement realty. Many Thanks Diane for your wonderful sentiments and know they also reflect who you are as my friend and a true skilled professional that expresses the Best in this industry.

"Seemed to me that those good established relationships should be prized and respected."

Yup...and that's the William I know...and love :) :) Of course you would direct her to remain with her agent...

Thanks for the wonderful talk today. I surely have a sense of 'being' after we're done. They are coming out ....and ready to roll....all our ways.

Hi William,

I'm in agreement with you on this one, I'm beginning to see this myself. It was also part of our discussion at our monthly mastermind today.

Aren't the NAR stats annualized, or smoothed? I did a study on them in the fall and went away dissatisfied with them. Anyway, that wasn't my comment - I wanted to say that I see buyers getting into the market this year through a process of self-examination and the decision to "buck the bad news" and go in with thier eyes open. The $8K has definitely played a large factor in my office.

Woo Hoo! I was so happy to talk with you today, 1st I needed the break and secondly even if I didn't , you make me smile both inside and out. You always listen to my anecdotal stories and you have this amazing gift to lighten any heart and make a person feel happy. And I know that is how Gary makes you feel. I wish he could know the many times you speak of him and your powerful LOVE of him and family is so wonderful and that also speaks to who you are. If I had to pay ActiveRain for just this one gift of our friendship at par value, I could never afford it and here I received it all for free. Aren't we so lucky and blessed.

Hi Lynda, Happy Tuesday. I knew that most must be seeing all the activity that is happening and I for one surely hope it lasts, believing of curse that it will. The eternal optimist here, :-) With all the good things that going on that April 3rd date is inching clser and it surely hope it doesn't put the kabash on things. Perhaps no one will be paying much attention and it will just be a minor hurdle for what feels like the beginnings of a recovery in the housing market. Thanks always for coming by and bringing your wonderful smile that would grace any post.

Hi Jeff, I guess that is why I don't really focus too much on them but just take the essence of them and share the positive. It seems for all that hear, that many markets are responding favorably to the Spring market and activity is really picking up in many areas. Other will surely follow because markets traditionally have their own cycles and they are not much affected by statistics. I loved some of the great market stats that people do here in the Rain though and I wish I could them like they do. Since I haven't the software or at least know how to use it, I don't even take a stab at them. But I am getting the new iWorks 2009 and my Apple Business rep said it is snap to learn it because he teaches it and soon I will have some new tools in my arsenal. Thanks for dropping over to this side of the world Jeff and delighted to see you again and glad business is really picking up for you as well. Yea ! for the $8000 credit. It might be short lived but it does seem to be getting markets to liven up again.

We are seeing a flurry of activity in the last 10 days. So maybe you are right that we are bottoming out. Now I am hoping that my hesitant buyers will feel more confident that this is the right time to buy. Like you I want what is best for the client.

I also am keeping an eye on the real estate market in San Diego so your information is valuable to me personally too. I am looking forward to an active summer.

I am finding the same thing. I think it is a combination of lower prices, low interest rates, and the $8000 new homeowners tax credit.

The Tax Credit Act of 2009 is good, but I am finding the lending requirements quite confusing. I am in the Bay Area - Berkeley - and am told by my loan broker than family members are no longer able to loan money to their children. If family members are involved, I am told that the money has to be a gift and that lenders are looking for 20% cash from the borrower. Anyone else having this experience?

William:

Whatever the cause of the increased activity, I am pleased to see it. I think part of it is buyers have been sitting on the fence and now are realizing conditions could be ripe for them to make a jump.

Jeff

The good thing here is the POSITIVE news in the public eye... I have seen increased activity here as well.

There's positive feedback and constructive criticism, and somewhere in between there is just negative naysayers and naive optimists. I agree wholeheartedly with William that attitude, belief, hope, or the opposite, have had a huge, immearsurable effect on the economy and real estate market. So, yes, it IS nice to hear positive news, and I do believe that is having as much of an effect on the upswing in my market, albeit modest, as low interest rates and a tax credit. The other thing I've realized recently, is how many people still don't know about the Homeowner Affordability and Stability Act and what it could do for them. So, we need to get the word out and remain positive. Most importantly, like William and others among us, we need genuinely to care about our clients and do what's best for them. I predict continued improvement in the real estate market and economy--okay, so call me a Pollyana!

~Ninah

MAR

The negativity in the press seems to have gone down. Mostly though it makes sense for first time buyers, eventually they are realizing this.

Hi William-I'm so happy to hear that there are indeed first homebuyers out there ready to jump in despite the negative media. CONGRATS on being yourself and gaining another client. I know you will take real good care of them. Have a great Weds.

Our numbers are up for February as well. With home prices low, and the price of money (interest rates) so low, it had to happen. The cycle has begun to slow and the pendulum is ready to swing back the other direction. First time buyers ARE engaged in my market and that is the beginning of a new cylcle.

Good Article Man!!! I believe that there is this push of 1st time homebuyers because of the advantages of an FHA mortgage for them not to mention all time low rates. I think even the novice buyer knows that these conditions will not be around forever, you have to live somewhere and why not own for less than renting in a lot of cases.

William you certainly are a trusted friend and advisor. I like the way your inquired about the real estate agent to help give guidance and direction and to make sure this person was going to serve this client well. I am seeing a glimmer of light, but I am not it is due to the short sales and foreclosures. Most of our first time buyers shy away from them. We are even seeing note in our MLS that state "not a short sale or foreclosure"! However, due to the prices becoming more reasonable, the tax credit and the interest rates being blow, many first time buyers can see opportunties that didn't exist a while ago.

With regards to NAR's statistics, it would be helpful to have a closer look at what they mean and who the purchasers were. The Wall Street Journal seems to indicate that many of these foreclosures and short-sales are being bought by investors who will flip them when the market recovers a bit more....

From one William to another......your comments are true to the point all over the US. I happen to own a mortgage company in Indianapolis (actually a Private Mortgage Banker and my wife is the real estate team leader with KW). With the HUD homes, REOs and Short Sales, we have seen a surge of fist time home buyers who now can qualify for these homes. Indianapolis did not suffer as much from the bubble, but we have had more than the average of foreclosed homes. Thanks for your comments.

William Haddad

Good article William. I also believe we are at the bottom of the market and the the stats from NAR are accurate. Investors have become very active and that is a sign of change. They ultimately drive the market.

I'm sure this scenario is being played out all across the country. People are simply waiting, and perhaps the first wave of buyers is coming out to take advantage of low rates, the tax credit and lower real estate prices. Will there be a greater second wave????

I am sure that the $ 8ooo tax credit is going to be a very good stimulus for first time home buyers , but I also know from recent conversations with several potential first time home buyers that most of them have no knowledge of this " gift ". This were college educated profesionals, busy in the work place and active with all other things that go on in their life.

We as realtors keep up to date on the real estate related financing and government rules, regulations and tax implications, but the general public does not.

If we want to use this opportunity, together with many home buyers, we have to use our advertising and communication vehicles to bring this to the attention of the public.

William,

I loved your story. I think you are right about this generation of first-time buyers, I think they are smart and tuned in, for the most part. They value relationships, and you're a great example of integrity by recommending that she stay with the agent she'd formed a relationship with.

As far as NAR stats, I think our local stats are more important. Our Feb. stats were lower than Jan., unlike the national stats. But our pendings are double, which is a great sign.

Nice post. I did an article in our Evening Sun newspaper about 2 weeks ago to encourage buyers to jump off the fence. Hopefully, they will start to "move" in all areas of our nation.

Good to hear you respect relationships established with others. Nice job. Integrity, honesty, knowledge.....that is what we all strive to provide our clients.

William,
Thanks for sharing an encouraging view of the first time home buyers. The American dream of home ownership is still very strong. With all the convening factors, now is indeed a great time to buy.

Well done William, I am experincing similar increase in investors and 1st time home buyers getting off the fence and starting to commit.

Hi William,

you are so right about making those lasting friendships. I feel that when I get a client, I want them to be a client for life and a friend (for the most part). I know that in doing this they will want to send me their family and friends. Also first time buyers now have the $8,000. credit that helps as well.

Now is a great time for first time buyers. I'm working with several. One lady was pushed over the fence by the $8000 credit.

Now all we have to do is find her a good place that doesn't have multiple offers by the time we get there...

There are a lot of positives to buying right now. But I think you hit it when you mentioned that this buyer had stable employment. The biggest barriers I see to home purchases right now is fear of job/income loss.

In my area prices are pretty stable, rates are low, the tax credit is a great incentive, etc. Consumer confidence in the economy/employment is the key.

Our market is picking up here in Northern Colorado as well. Last week was an amazing week for showings of my listings in different price ranges. I too want to say what a class act you are for not going after a referral fee when there is already an established relationship. I enjoyed you positive post.

Hello William,

Thank you for sharing!

I am glad to hear that our housing market is starting to heal and that we are starting to see positive news about the housing market on television and Yahoo. Let's keep learning about this new market to be able to assist our clients

MAR

William, thanks for this information. So much positive news right now; especially if you are looking for it and keeping your ears open. We need to continually have conversations with our friends and family and past clients to keep them up to date on the changes so they can in turn further disperse the information.

You are obviously well respected and reveared by your clients. Well Done!

Very nice comments. First time buyers have been given further incentives here as well so the market has improved this month over the past few months.

William,

I totally agree with you. Being honest in this business is critical. I also agree that it is a great time to buy. I have also seen a pick up in activity in my area.

We will recover!

MAR

And first time buyers are so much fun to work with, too!

APR

What a terrific illustration for this post, William. Great piece. !

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