Traditionally, new buyers take their first homeowner’s plunge with what is termed a “starter home” – confining their area home search to relatively inexpensive and modestly sized properties. Today a shift is underway. Many prospective buyers are finding the traditional starter home is no longer a necessary first step. I think it’s due to our current market’s desirable conditions, but no matter what the reason, more first-timers are finding it beneficial to sail past the starter home market and step right into a larger, more long-term property. The unusual combination of circumstances is national in scope:
More House for Less – Viewed from a historical perspective, house prices are still down near the bottom of the charts – though it’s looking as if that is not likely to last much longer. The National Association of Realtors reports that year-over year sales growth and prices continue to climb, although the latest contract numbers for August show a slight dip in volume. Bottom line: a buyer today can buy more house right now than he could in the past.
Home Price Uncertainty – The global financial meltdown has had one undeniable consequence: individuals and businesses are more conservative in their expectations. The old plan to buy a small house — then sell it in a few years for a huge profit to finance the next house – does not seem to be such a sure thing in peoples’ minds. Unless a buyer is confident that the family will be content to stay in a starter home for 7 to 10 years, it can make more sense for buyers to set their local home search parameters to include houses that meet long-term needs.
Buyer Expense-Cutting – By skipping a starter home, homebuyers avoid paying mortgage, moving and closing costs twice. That doesn’t even include the minor costs that tend to add up both from selling the old house and buying the new: fresh paint, new carpet, new appliances, new furniture, etc.
Starting a home search is exciting anytime, especially when it’s your first house. Buyers looking to take advantage of low prices and inexpensive loan rates don’t have to be first-timers to find they can afford more house than they previously assumed. If you have been considering buying a home in our area, I’d love to help you find your dream home. Contact me anytime and we will schedule a local home search consultation!