What the heck is happening in the world of local Real Estate?!
Many buyers are experiencing frustration over the local market and the lack of available inventory. I work both Boulder and Broomfield counties and have seen both markets (especially Boulder) hit with low inventory and rising home prices. There are multiple factors that are contributing to the situation:
- Sellers are hesitant to sell for fear that they will not find a replacement home.
- Low inventory is putting sellers in the driver’s seat, and is encouraging them to list for an inflated price.
- The market – especially within the City of Boulder – is flooded with sophisticated buyers that can often afford to pay cash for their purchase, thus paying the high prices sellers are demanding. This makes it complicated for a buyer that needs to finance to submit a competitive offer.
- Each new sale at an inflated price raises the bar for the next listing – each sale continues to build upon the last, causing home prices to keep rising.
For now, this is the nature of the local market. So as a first time buyer trying to break into the market, what can you do about it? This is part one of a three part series that will take a look at some suggestions as to how to best navigate today’s market d upon the unique needs of three different buyer / seller groups: “The First Time Buyer”, Selling and Moving Up” and “Downsizing”. Please check out next week’s blog when we discuss the unique needs of the “Selling and Moving Up” buyer / seller.
The First Time Buyer
Here are some tips that will help you hit the ground running and buy your first home!
- Get your finances in order. If you need to secure financing speak with a local lender that is familiar with the market in the area that you plan to purchase. The advantages of using a local lender:
- They know the local market and the challenges that go along with it. This will enable them to customize a financing strategy that will be most beneficial to you.
- They use local appraisers that know the market. Appraisals have been problematic in a market where home prices are steadily increasing. A local appraiser can make the difference between your purchase reaching the closing table, or terminating at the Appraisal Objection Deadline.
- TIP: Speak to more than one local lender. Not all lenders are created equal, and just because one lender gives you disappointing news does not mean that they all will
- Be realistic! I cannot express this enough. Do your part to familiarize yourself with the market in which you plan on purchasing.
- Know how far your dollar will take you in various neighborhoods. Your Realtor can help you by sending you listings that match your needs and budget for you to review. This will help you develop a sense for the market in the neighborhoods you are searching.
- Drive by the homes your Realtor sends to you and check them out. Make a point to drive by at different times of day to experience traffic and lifestyle within the area.
- Talk to neighbors. This can be invaluable!
- Stay open minded.
- Consider a different area (i.e. you “want” to be in the City of Boulder, but maybe you should consider Louisville, Lafayette, Niwot, Longmont or Broomfield). Different cities will have different price points.
- Broaden your search criteria. Do you “have” to have that 2-car garage, or would a 1-car garage in a nicer neighborhood be okay if it allowed you to get your foot in the market? The same goes for finishes. Ideally you will find a home where you can move right in and enjoy. However this may not be a reality in today’s market. Know where you are willing to make concessions – ugly paint, or an outdated kitchen (that is still functional) are all things you can change in time.
DON’T WAIT! If you can afford to buy, buy now. With home prices on the rise, now is the time to get your foot in the door so you can take advantage of the equity you will build in your new home.
Most importantly work with a Realtor! We are the ones that are out here working the market day in and day out. We see the different scenarios and can advise you about market value, and what strategies work best. Remember, your Realtor is on your side and wants to help you! Even with the challenges of the current market there are steps you can take to achieve your goals if you are willing to broaden your search and stay open to new possibilities!
Again, it is more important than ever to engage the services of a licensed Realtor that is accustomed to working with first time buyers and can assist you with your unique needs. You will need to be ready to act quickly when the right home comes along. Your Realtor can help you so you are prepared and don’t miss out on that “just right” home.I work with both buyers and sellers and am available to answer any questions you may have!