April 5, 2018
Starter Homes: First Time Home Buyers are Bearing the Brunt of the Housing Market
As a first-time home buyer you may have been noticing that your “starter home” has become pricier, older, smaller, and lower quality. According to statistics via Trulia these things you have been noticing are accurate. Starter homes are not at all what they used to be. They are older homes that need a lot of repairs and updating. Starter homes are outdated and need a lot of TLC and even if first time homebuyers can afford one of these homes, they do not have the income to do the necessary repairs and updates needed to maintain the quality of the home.
Here are some statistics from Trulia that shows just how true this reality is:
- The portion of income needed to buy a starter home went up 4.2% since this time last year
- Inventory of starter homes is down 14.2% this quarter
- Starter homes prices have seen a 9.6% increase since this time last year
Starter homes are less likely to be move-in ready making these homes part of the fixer-upper market (hey I guess that is good news for all of the home remodeling shows but not so much for first time home buyers). Even with the price of these homes increasing greatly over the past 6 years this may not mean the value of the home is in line with the asking price. When you start to chip away at all of the repairs and replacements that are needing to be done this could bring down the true cost of the home.
This all sounds very negative for first time homebuyers and the starter home market but there are always positive aspects to every situation and we would prefer to focus on those. Hiring an inspector and asking people you trust who are qualified and knowledgeable on home remodeling and repairs is important before you make a purchase. You need to know what you are up against and that is where people who have that knowledge can let you know what repairs are going to cost, which ones are urgent and which ones can wait. Also, ensuring your real estate agent has extensive knowledge in what you should be paying for the home and very successful negotiation skills are key to getting the right home for the right price.
We know this looks a little scary, but we are here to help you navigate the home buying process and succeed at finding the home that is right for you while also guiding you through what is affordable and the best use of your money when it comes to your home.
For more information visit https://www.trulia.com/blog/trends/inventory-q118/#_ftnref1