First Time Homebuyers – Carpe Diem!
The two charts from Trulia below offer a close up look at my neighborhood of 30033 North Decatur, and compare it with the 5 zip codes that comprise “greater Decatur.”
The Decatur example can be easily compared to other parts of metro Atlanta – the trends look similar.
Here are the facts:
1. every year, prices and activity decrease in the winter months – veteran real estate owners and investors know that…these charts do not lie
2. sales volume and sales prices peaked in the Summer of 2006
3. The Intown Insider bought a Decatur townhouse at the bottom of the market, in the Autumn of 2010, and sold it for a tidy profit in the Summer of 2014.
4. Prices go up, then they go down, quarter by quarter, year by year – the Winter months are always a solid time to take advantage of ample supply, and less demand
5. Rates remain so low, we truly are in a “Golden age of real estate”
While many signs continue to point to an economic recovery, housing is still lagging behind and part of this can be attributed to the massive drop in first time homebuyers.
The rate of first time homebuyers purchasing homes has fallen by over 33% and has dropped to its lowest level in over 27 years according to the National Association of Realtors.
What are the reasons for this remarkable lag?
Housing affordability is currently hovering at historical lows. While prices have risen over the past 24 months, rates continue to be stable in the high 3% to low 4% range and underwriting guidelines are much easier.
Current rent levels in the Metro Atlanta area continue to rise and many apartment dwellers are finding themselves paying $1500 per month or much, much more for a two bed room apartment with thin walls, fossilized AC and furnace equipment and dated decor.
Having a party and cooking on on the grill cannot happen for these “tenants” - these regulated residents are not allowed to have BBQ grills, right?
So, why do they do it??? Why do they confine themselves into a 1000ish square foot apartment with limited privacy and a less than fresh living space when they could easily be in a $200,000+, 2000 square foot home with their own yard and BBQ grill for the same as they are paying in rent today?
And let’s not forget the tax write-off.
Down payment??? This can be obtained in the form of a “gift” and can be as little as 3.5% of the sales price.
Downpayment??? How about downpayment assistance for qualified applicants?
Today’s “potential” first time homebuyer has lived conservatively for the past 7-8 years (sometimes at their Mommy and Daddy’s house), and they understand the news about purchasing homes has for the most part been bad, even though the data reveals a different scenario, doesn’t it?
We do not live in New York City, or Chicago, or San Francisco…we live in Atlanta where there is a multitude of beautiful homes available and more arriving on the market every week as new construction is stabilizing.
First time homebuyers enable current homesellers to move up, over or away from their current homes. The market needs first time homebuyers, and first time homebuyers have many incentives to move away from renting.
Get your real estate on – now is a really, really good time to do so.
Stay tuned for the next post, which will feature an updated look at the “Rent vs. Buy” index for Atlanta.