Patience, Persistence, And Positivity: The Scramble For Entry Level Homes

Written by Posted On Friday, 06 November 2020 05:00

Once upon a time, in a galaxy close to home, a great pandemic washed ashore. Schools and offices shut their doors. Theaters, gyms, and restaurants went dark. Zoos and museums were closed to the public and flights were effectively grounded - and while millions of Americans found themselves jobless, millions more were sent to their homes with a mandate to work remotely.

And a strange phenomenon took place. 

Shut-in families found the walls closing in. They longed for desk space, acreage, swimming pools. City folk no longer tied to the freeway dreamt of a place in the suburbs, and people staring down the road at retirement chose to do so early - and the wave of discontent unforeseen in early spring became a tsunami by summer, as buyers competed for housing inventory that was in short supply to begin with.

“We have broken all sales figures for the month of October,” said career agent An Marshall, Berkshire Hathaway HomeServices Florida Network Realty in St. Augustine. “We had 13 closings in one day last Friday - a record in my 30-year experience.”

In today’s historically low mortgage rate environment, she said, first-time buyers are doing whatever it takes to get into the market - investing their savings, borrowing from parents, pulling money out of other assets, in the hope of outbidding like-minded rivals for a crack at first-time home ownership.

“It’s the American Dream on steroids,” said Better Homes and Gardens Real Estate agent Robbie Smart in Kansas City. “In the low end of our market - $225 to $400,000 - a new listing can draw 40 potential buyers in its first 48 hours on the market and sell in the blink of an eye.” 

Even properties that need a little TLC are flying off the shelves, Smart said, noting that young families are willing to do the work if it means jumping into home ownership. 

Third-generation Ohio Realtor Ben Calhoon agrees.

“It’s all about affordability,” said Calhoon, Berkshire Hathaway HomeServices Calhoon Company Realtors in Columbus. “Buyer competition is off the charts, and with prices rising faster than salaries, and inventory in short supply, a $250,000 listing - rare by Columbus standards - will bring as many as 20 offers in a day.”

In the effort to bring more low-priced homes into the equation, he added, Realty board members throughout the area volunteer their time to improve some local neighborhoods free of charge, re-painting, doing minor repairs, even adding new playgrounds.

“And still,” said Calhoon, “too many first-timers are being priced out of the market.”

In San Francisco’s Bay Area or tony East Bay, where it’s nearly impossible to find a single-family home anywhere for under $600,000, the competition is no less keen for aspiring first-time buyers. 

“The market’s so hot, you can fry an egg on any doorstep,” said Linnette Edwards, founder and associate broker, Abio Properties in Oakland. “San Francisco renters are flocking east to Oakland, and a lot of East Bay residents who can work remotely are leaving the state for the wide-open spaces of Denver or Boise, where land is more affordable.”

The sad fact for first-time buyers, Edwards noted, is that the average price of homes in desirable East Bay homes is well over $1 million - and yet multiple offers and bidding wars are typical.

 “I sold a home for $1.75 million the other day to a young, engaged couple who’ve been saving their money for a down payment. With rates as low as they’re ever apt to be, they knew that this is the time to gather their resources and pull the trigger.”

The good news for this couple, she said, is that they don’t have a home to sell, because today’s sellers want no contingencies and typically accept the bid with the highest down payment.

“Some buyers are reluctant to put their present home on the market for fear they will not be able to find what they are looking for,” Edwards said. “But houses are selling so fast that we have to advise them to sell first, so that they are contingency-free.”

In this super-heated market, she said, it more than ever necessary for agents to protect their buyers, especially the first-timers who are so disappointed when they lose out to another buyer on a property they really wanted.

“It’s hard to have your heart set on a home - sometimes more than once - and not win the bid,” she said. “We sometimes we suggest that they look for the ‘ugly duckling,’ a home that needs some work, that has been on the market a bit longer.”

Most times, she added, it takes some practiced hand-holding to keep their confidence up.

“I remind my first-time buyers it takes three important P’s - patience, persistence, and positivity - to be successful in today’s home search.”

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Barbara Pronin

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade. She is also the author of three mystery novels and two non-fiction books.

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