First-timers dilemma

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Home prices are dropping, but should first-time buyers jump in?

By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Everyone likes a bargain. So it’s no surprise that as home prices fall in many markets, those who have been priced out of owning a home are beginning to take notice.

And some in the real-estate industry are saying that factors are aligning to make this a good time for first-time buyers to be in the market because they don’t have to face the challenge of selling a home in order to buy another.

In certain ways (and in certain places) these agents are right: Home prices are dropping, there’s often a glut of inventory to choose from and interest rates are still relatively low.

That’s saying nothing of the foreclosures out there. In fact, bank-owned properties are lately making up the bulk of real-estate agent Annie Brown’s showings.

In Brentwood, Calif., just east of San Francisco, homes that were priced at about $700,000 or $800,000 are now listed at $450,000 and $500,000, said Brown, who works for Zip Realty. In many cases, the homeowners couldn’t afford their mortgage payments when the interest rate increased on their adjustable-rate mortgage, and they ended up in foreclosure. The banks, not thrilled about having the homes on their books, are pricing them to sell, she said.

“I’m seeing some fantastic prices right now, and the prices seem to be stabilizing,” she said. “This is absolutely a wonderful time… a perfect time to start searching for a home.”

But there are also roadblocks that first-time buyers are facing.

Story continues here.

1 comment so far ↓

#1 Daytona Beach Florida Real Estate on 03.11.08 at 12:01 pm

I couldn’t agree more that for a first time home buyer and not having to sell there home first to buy they can jump right into a property and probably get more than they imagined as prices have dropped.

The first step is meeting with a lender and seeing if and what you qualify for in a loan and then start your search with a realtor who can best guide you in this current market.

With limits raised on many loans you can still qualify for many loans with little down payment. The thing to realize is homebuying can be a long term investment and have it’s up and down trends in value and buying and selling can be affected by this.