This week I got an email from a young man in New Jersey who has been thinking about taking the plunge and buying his first home, he has been listening to the show via the podcast, and is grateful for the advice I have been giving. There are a lot of myths and half-truths surrounding the real estate market these days, and it can be pretty daunting for a first time buyer, now I am not saying that everything is Rosy, but if you are in it for the long term, Real estate is still a great investment, and there are some great programs for financing for fist time buyers. The National Association of Realtors released their third quarter survey last week and reported that 28 out of 152 metropolitan areas showed increases in median home prices from the same quarter in 2007, 4 remained unchanged and 120 declined. The typical seller purchased their home six years ago and in spite of the recent downward price trend, has experienced net equity gains. Nationally, homes increased 18.3% since 2002, and 90 % of all metro areas show six-year price gains. With historically low prices and interest rates, coupled with the improved FHA guidelines, and the first time homebuyer's credit, it's an optimal time for entry-level buyers with a long-term view, and the National Association of Realtors reported that 41% of all transactions involved 1st time homebuyers in 2007. According to the NAR report, the median income for a first-time buyer was $60,600 and typical first-time buyers bought homes costing $165,000. Of first-time buyers who made a down payment, 69 percent used savings and 26 percent used money from a friend or relative. Another 7 percent received a loan from a relative or friend, while 16 percent used funds from their investments. A fixed-rate mortgage was chosen by 92 percent of those surveyed. For First time homebuyers, The biggest fear is the unknown, Homeownership doesn't come with a manual, and a little understanding will go a long way, especially in these economic times, According to data from NeighborWorks America, a community advocate group, foreclosure rates for homeowners who attended homeowner education programs was 20 times less than that among subprime borrowers ,and they performed three times better than those in the prime mortgage market during the second quarter of 2008. To that end, Residential Properties LTD and Homestar Mortgage will be hosting First time home-buying seminars throughout the state starting after the first of the year. This week Steve and I talked with Ian Barnacle a sales associate in Residential Properties Providence office, Ian offered his perspective both as a buyer's agent who helps first time buyers, and as a first time buyer himself. This Week's Real Estate Insight:
Pushing yourself up to or beyond your limits leaves you highly exposed when changes to the national or your personal economy occur. Realize that your first home will not meet 100% of your wants and needs, determine the most important of your needs and the most desired of your wants and select a home that meets the majority of them.
