How to Get into a Competitive Housing Market
Sky-high home prices. Mortgage interest rates as high as they’ve been since 2010. Getting into this market for the first time seems tough…but it’s not impossible. If you keep these five first-time home buyer tips in mind, you have a much better chance of cracking into this sellers’ market.
1. Take a Second Look at Your Real Estate Wish List
When first-time home buyers start thinking about properties, there’s usually a flurry of things they want.
- An extra room for a home office.
- A yard for the dog.
- A good school district for the kids.
- Modern construction.
- Big kitchen.
- Walk-in closet for the master bedroom.
The list goes on.
One important way to get into this market is by scrutinizing that list carefully. Divide what you come up with into “wants” and “needs.” Focus on the needs.
With inventory still low and prices still high, you will likely need to pare down your needs list as well. This means thinking carefully about what really matters to you in a home.
Get creative with workarounds and solutions. If an extra bedroom for a home office is bumping you out of your price range, consider buying a smaller home and renting a desk at a local coworking space.
Or choosing a home with a spacious master bedroom that allows room for a desk.
Or finding a home with a small extra room that isn’t technically a bedroom.
Being flexible on your list can open up a pool of more-affordable housing opportunities you hadn’t considered.
2. Be Patient
If you’re serious about getting into this housing market, you might need to exercise some patience. How so?
For some first-time home buyers it means getting in with a “starter home.” This isn’t the home of your dreams, but it is an effective way to build your wealth through home appreciation and equity.
A few years later, once your earning power improves, you can translate that starter home into something even better.
You can find these less expensive homes by…
- Opting for a condo or townhouse, which is often cheaper than a detached single-family home.
- Compromising on square footage.
- Investing in a fixer-upper. (If you’re handy and make improvements, this can be a huge way to build equity in a short amount of time.)
Once you’re in the market, it’s often easier to buy those more desirable properties down the line.
In the meantime, you can always make adjustments, improvements, and renovations to ensure your current home suits your needs and wants as much as possible.
3. Take Advantage of First-Time Home Buyer Assistance Programs
Saving up a down payment can be tough. Add in inflation, the rising cost of living, and ballooning home prices, and it becomes really tough.
But there is help available.
First-time home buyers have access to many down payment assistance programs that can ease the barrier to entry into the market.
If you’re having trouble getting together the money needed to buy, remember this:
- Needing 20% down is a myth.
- Lots of assistance programs are geared specifically toward first-time buyers.
- Active-duty military, teachers, first responders, and others have even more program options.
4. Be Open to New Neighborhoods
One of the biggest determiners of price is location. After all, when it comes to real estate…
Even within the same city, prices can vary dramatically. If you’re willing to be flexible on your specific neighborhood, you can end up getting a lot more home for your buck.
Especially if you’ve recently transitioned to remote work, you might have a wider search area than before.
Also, don’t forget…if you choose somewhere with an overall lower cost of living, you give yourself more financial room on your mortgage.
Essentially, it’s a balancing act between where you want to live and how much you want to pay.
5. Work with a Professional Real Estate Expert
Navigating that tightrope between location and price point can be difficult if you’re going it alone. This is where working with a real estate agent can be invaluable.
These experts have specialized expertise in local real estate and can offer great insight into what areas offer on-budget homes that tick all your boxes:
- Home size
- Lot size
- Bedroom count
- Age and condition
- Proximity to work, schools, dining, entertainment, and more
Ready to Jump into the Real Estate Market?
If you’re serious about getting into your first home soon, it’s time to think about these three keys:
- Narrowing down and finalizing your needs in a home.
- Expanding your search area.
- Finding the right Realtor to help you navigate the process.
Have questions? Ready to get started? Contact us today.
We’re always happy to help, and we can’t wait to show you real estate as it should be!
