All real estate is local - and it is also time sensitive. The market in New York City has little or no impact on the market in the DC metro area. The buyers' market that we dealt with in 2008 has no impact on the market now. The real estate market is constantly shifting and buyers (and sellers) have to shift too. You can sit in a corner and feel sorry for yourself that you missed out on lower interest rates, a market filled with great homes being offered by sellers begging you to make and offer, or lots of new homes with builder concessions - or you can deal with the market that you are in with the interest rates you have. There are still opportunities out there but you need to be a bit of a truffle pig to find them.
Buying your first home is an exciting decision and a major milestone that has the power to change your life for the better but it is hard now with the twin obstacles of high interest rates and high prices. In fact, since 2011, the number of first time home buyers have been held below the historical level of 40%. This is particularly unfortunate because homeownership really is life changing. The difference in net worth between a home owner and a renter is 40x greater on average. That significant change makes home ownership worth pursuing.
That said, if you’re looking to purchase your first home, here are some things you can consider to help make your dreams a reality.
Save Money with First-Time Homebuyer Programs
Being able to pay for the initial costs and fees associated with homeownership can feel like a major hurdle. Whether that’s getting a loan, being able to put together a down payment, or having money for closing costs – pulling that money together can be challenging. Fortunately, there are a lot of public and private first-time homebuyer programs that can help you get a loan with little-to-no money upfront. Fortunately, Maryland and DC have robust first time homebuyer programs and down payment assistance programs.
To take advantage of these programs, contact the housing authority in your state and browse sites like Down Payment Resource or reach out and I will connect you with some lenders who work with the various local first time homebuyer programs.
The Supply of Homes for Sale Is Low, Explore Every Possibility
It’s a sellers’ market, meaning there aren’t enough homes on the market to meet buyer demand. In Montgomery County MD there is only a .8 month supply of housing. In DC, the supply is better at 2.8 months and the overall DC metro area is 1.1 months.
So, how can you be sure you’re doing everything you can to find a home that works for you? You can increase your options by considering condos. Condos tend to be less expensive that single family homes because they are a more efficient use of the limited land that we have in the DC metro area.
In addition, condo prices have been held down for the last few years, first by the very low interest rates which enabled buyers to skip the starter home (typically a condo) and go straight to the move up home, and then by COVID anxiety. Buyers didn't want to move into condos with their closer proximity to their neighbors because we didn't know what was causing COVID infections.
Another way to increase the supply of homes available to you is to look at the listings that have been on the market for a few weeks or months. Very often these homes are great properties that were overpriced to begin with and now have become stale. You might be able to get a good deal now because that seller has become more motivated over time.
Tell all your friends that you are looking for a home. Chances are they may know someone who is planning to sell. Join a facebook group that is geographically based in the neighborhood that you want to move to. Keep your ears open for homes that are coming on the market before they become public knowledge.
The best way to make sure you’re set up for success, especially if you’re just starting out, is to work with a trusted real estate agent. They can educate you on the homebuying process, help you understand your local area to find options that are right for you, and coach you through making an offer in a competitive market. challenges for first-time homebuyers.
While the market is challenging for all home buyers, but particularly for first time home buyers. Still, there are ways to achieve your goals, like utilizing first-time homebuyer programs and considering all of your housing options. Let’s connect so you have an expert on your side who can help you navigate the process. Please call us at 240-401-5577 or email me at firstname.lastname@example.org. I look forward to hearing from you!.