First-time buyers want larger homes, not fixer-uppers
Real estate brief
By Inman News, Friday, September 5, 2008.First-time home buyers are primarily concerned with affordability when choosing a new home, but their expectations may be too high relative to their current financial buying power, according to a recent Coldwell Banker survey conducted among its brokers. While nearly half of the Coldwell Banker broker respondents reported that affordability was the No. 1 concern for this group, 81 percent said today's first-time home buyers consider move-in conditions to be very important when searching for homes. In contrast, only 7 percent are looking to purchase "fixer-upper" homes that they could buy at a lower price and renovate themselves.
According to 29 percent of brokers surveyed, first-time buyers were more concerned with down payments 10 years ago than anything else, while only 17 percent said this is the biggest concern in today's market. Meanwhile, survey respondents said that only 4 percent of first-timers were worried about their credit scores in 1998, while 14 percent said it is more of a concern today.
Additional key findings from the survey include:
- 71 percent of brokers noted that first-time home buyers are looking for larger homes than they were 10 years ago.
- According to 41 percent of the respondents, proximity to job is the No. 1 attribute first-time buyers are looking for in a home.
- 35 percent of the survey respondents said "investment" is the No. 1 reason first-timers are making their purchase.
- 46 percent of the survey respondents reported that first-time buyers look at five to 10 homes, on average, before making a purchase.
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Submitted by Mike Sparr on September 5, 2008 - 1:36pm.
This is a great post. Here's a story of two 25 years olds and how much we differentiate in our home opinions.
My boyfriend and I have a different attitude when it comes to this. We're both 25. When I met him almost a year ago, he had recently bought a 5bd, 2ba home built in the 50's. Since it was built, very little work has gone into keeping it updated from what I can tell. Don't get me wrong, the foundation itself is great and the home has a lot of potential, well that and a lot of work!
Last spring he began tearing apart the basement bathroom, which lead to the wood paneling, carpet and drop ceilings throughout the entire basement. He has just these last couple of weeks had the chance to begin putting it back together, starting with the bathroom.
Here is our differences:
*I would have bought a newer home that needed minimal work, if any. I could have bought a brand new house in a less desirable area for about 20,000 less. He bought a fixer-upper house that is in a great location and has the potential to make some extra money by putting work into it.
*I would have bought a place that had minimal yard work as I am hardly home as it is to take care of a lawn. He's already put in a new patio and now has to replace the surrounding grass that's left as it all got tore up in the process.
*I would have gone for a cheaper home that I could afford to live in by myself. I'm over roommates. He bought a home and has 4 roommates that help him pay the bills so he can put work into it. He could afford to not have roommates, but the progress would be much slower on remodeling.
My hat off to him for giving it all a go. It's not very often anymore that you find young adults not only willing, but have some of the trade skills that can pull things apart and put them back together. Yes, sometimes they don't go back together quite as smoothly, but at lease he's giving it a try!
Either way, he's the one with the home, and I'm not, so he's the one coming out on top so far!
Submitted by Lenore & Alex Wilkas on September 5, 2008 - 2:04pm.
What a perfect example of what's wrong with the foreclosure mess today! I want a bigger house. I don't want to do any work on it. I don't care if I can afford this, I want it and I want it, now, and I'll get it and walk away when I can't pay the mortgage. Is something missing here?
Well, pay your dues. I want a lot of things, too, but I prefer to go with what is possible rather than what I wish for. Wishes do come true, with work. In this case, sweat equity and buying what you can afford which just might be smaller than you'd really like, but, oh well.
I love working with first time buyers who are realistic. They have to be in order to buy a first time home on the San Francisco Peninsula. Our prices for entry level equal prices for luxury homes in many markets across the country. But the ones who recognize what sweat equity will do for them are the ones who are beginning to build their fortunes in real estate.
What I don't get is the need for instant gratification without paying for it from so many people. With only 17% worrying about downpayment, no wonder we have the mess we're in. If the lenders don't educate who will? I sure try to in my blog. I know others who do as well, but we're far and few between.
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Lenore Wilkas
Prudential CA Fine Homes International
www.SanMateoRealEstateNews.com