First Time Home Buyers - Why Are You Waiting?

Real Estate Agent with RE/MAX Commonwealth

I am a little bit flummoxed.  Right now, housing affordability is the best it's EVER been, since the National Association of Realtors has been tracking the statistics.  Interest rates are at record lows, under 5% in many instances.  The Federal Government is still making 3.5% down payments, under 5% interest rate financing available to buyers through its FHA program.  AND there is a federal first time home buyer credit available of $8,000, which means eligible individuals or couples filing jointly will get an $8,000 credit on their 2009 tax return.  That is essentially $8,000 in free money back from the government, just for doing what we're all told is the American dream, buying a first home.

So why aren't first time home buyers out there in droves?  Or why aren't the ones that are out there BUYING, rather than just lolly-gagging around and looking?

I don't know the answer.  I really AM flummoxed.  I welcome any feedback from you fence-sitting buyers, or other real estate professionals.  The only thing I can come up with:  buyer psychology.  That d*mn national media has been talking for so long about the sky falling, it's become a self-fulfilling prophecy.

My advice, if you are a first time home buyer that's been taking his or her or your collective sweet time:  Get off the fence NOW.  It's the Spring market.  Inventory isn't going to get better.  There is no guarantee the interest rates will stay at these record lows.  And the $8,000 tax credit expires on December 1, 2009.  That means you have to have closed on the sale by no later than November 30, 2009 to get that free $8,000 government handout.  And trust me, the way loan officers are swamped right now, with refinancing and sales, don't think you can write an offer September 30 and be closed on time.  Oh no.  I think loan officer volumes are going to get even heavier as people realize time is running out, rush to get closed, and that December 1, 2009 deadline looms nearer.

Don't miss the boat and be kicking yourself December 2,  If you're going to buy anyway, why not buy now?

Comments (7)

Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Great post! But we are seeing first time home buyers in swarms in our local Danville and San Ramon CA market area.

May 18, 2009 03:17 PM
Melissa Loughridge Savenko
RE/MAX Commonwealth - Richmond, VA

Thanks, Vickie!  We ARE seeing significant traffic pick up, even in the upper price ranges ($500K+ and up), which had been just sitting.  So it seems like the "trickle up" is working - first time buyers buying, creating move-up buyers. 

BUT...I work mainly in a historic neighborhood, that tends to be higher price per square foot, and has homes that really run the gamut in terms of renovation level and quality.  It's more the "champagne taste, beer budget" looky-loos that are driving me crazy.  The people that expect to buy a $450,000 for $300,000, because they've heard the market is terrible, and they're going to offer 35% off the list price.

Sigh.  I'm venting to an extent.  We really are seeing the traffic and the offers pick up SUBSTANTIALLY, and I am very thankful for that.  But there are still fence-sitters, and I'm just wondering what it takes to get these people OFF the daggone fence.

Thanks for your comment!

May 18, 2009 03:24 PM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Melissa.... FANTASTIC POST three cheers...I agree i think these first time home buyers are really missing out

on a once in a life-time chance...Thank you

 HelpfulHannah your friend in Philadelphiatweet this

May 18, 2009 03:26 PM
Mark Hall
Realty One Group Cascadia - Vancouver, WA
Homes for Sale Vancouver Washington

Obviously they are waiting for the market to hit bottom. Don't you read the papers? (wink!) Interest rate will soon be at 3% and home prices will continue to drop! Then they will all jump in and buy their dream home.

May 18, 2009 03:33 PM
Melissa Loughridge Savenko
RE/MAX Commonwealth - Richmond, VA

Oh Lord, Mark, you've met my buyers!  I love my clients, I really do, but the Gen X/Y young professionals CLEARLY know much more than me.  I only sell houses, you know.  [;)]

May 18, 2009 03:37 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Of course they might be wondering if they are going to have a job next year... if there is going to be hyper-inflation or a currency collapse because of the unsustainable debt taken on by the government...  Aside from that, I have no idea why some might choose to wait. 

May 18, 2009 03:42 PM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Melissa, Good post. Thanks for sharing.

Best - Sash

May 18, 2009 07:35 PM