First-time Buyers Are Facing Difficulties
No longer so. The housing inventory is down sharply, bidding wars abound, investors are pouring money back into real estate, and sellers are far more likely to accept those fast-moving cash deals than one involving an FHA loan, the preference of many first time purchasers of Magnolia TX homes.
The number of first-time buyers of Magnolia TX homes is shrinking. New home buyers made just 34.7 percent of all purchases in October, the lowest since September 2009. Three years ago, first-time borrowers were 47 percent of all buyers, motivated at the time in part by a tax credit.
First-time homeowners, who typically buy lower-priced homes and need extra financing, are losing out as the market shifts from distressed properties, such as foreclosures. Distressed sales, which usually cost less, were almost half of all of purchases a year ago, but now they’re just over a third of sales. At the same time, prices for all existing homes have been rising—prices were up 4.4 percent in September over the previous year, according to the Federal Housing Finance Agency—making homes less affordable for first-time buyers.
According to a summer survey by The Wall Street Journal, the decrease in supply and the increase in multiple offer situations is both surprising and frustrating to buyers. More than one-quarter of potential purchasers said they would stand back from the market if prices went up or they were in a multiple-offer situation. The survey also found that 16% of first-time purchasers of Magnolia TX homes were worried about bidding wars and that 21% were concerned about prices rising beyond what they could afford.
So what can a first-time buyer do to compete? Here are some suggestions:
- Broaden the search, even just a little. Expect to compromise on size, location,features, etc.
- Be prepared to act very quickly when a good property comes along.
- Shop around for financing other than FHA loans. There are conventional loans that require just 5 percent down, and sellers will view them as more financially stable.
- Seek a lender that can process the loan quickly. Look into working with a community bank or a local mortgage banker who can meet your needs in a timely manner.
Whether you are new to the Magnolia Texas real estate market, thinking of moving up, or you’re an experienced investor, Pam Sitterly has the expertise, proven track record, and resources to help you buy Magnolia TX real estate for sale or market Magnolia TX homes for sale. Enthusiasm, knowledge of the area and personal concern for her client’s interests combine to make Pam an outstanding resource for your real estate transactions.
Pam works extensively to help Buyers and Sellers meet their Magnolia Texas real estate goals. For more information about buying or selling your Magnolia TX home, please call Pam at 281-723-0324 or via email with this convenient contact form.