The Market is Open to First Time Buyers

First time buyers have faced challenges over the last several years – from qualifying for loans to finding inventory that meets their needs at the price that fits within their budgets. But the biggest challenge by far has been competition from investors.

Investors jumped back into the housing market in a big way in the last several years, often times buying up entry level priced homes for cash, thus beating out many first time home buyers who were qualified, since cash is usually a safer bet in the eyes of a seller. However, cash investors have slowed down this year, mostly due to the rise in prices.

The California Association of Realtors reports that in 2013 cash transactions dropped for the first time in seven years in California. Personally, only one of my many investor clients is still active right now, but slowing down, so this is accurate on a personal level as well.

The good news is that this offers some great opportunities for first time buyers. Although local inventory picked up slightly over the summer, it is still on the low side. Furthermore, many markets are becoming buyers’ markets, so that offers further opportunity to many buyers to be able to negotiate IF they can find a home.

The biggest challenge right now for buyers remains to be limited inventory. If you are a buyer it is imperative to find a skilled real estate agent who can understand your criteria, help you narrow down the areas and neighborhoods that you like, and be ready to view new listings and present offers as soon as they hit the market, in order to avoid competition.

First time buyers should get fully pre-approved by a lender and have a great agent on their side. They should understand the market(s) in which they are focusing, and be ready to go when the right home is found. For those who may be considering purchasing in the future, I highly recommend connecting with a real estate agent early – even up to a year early – in order to narrow down your criteria and start viewing homes and neighborhoods. That way, once you are ready to purchase you will be completely educated about the local market and the purchasing process, and you will be ready to act when the right property comes up.

Happy house hunting!