First time homebuyers continue to stir the soup

January 8, 5:59 PMHousing ExaminerDena Kouremetis

Previous Next

Comment Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the Housing Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

Househunt.com reports that first time buyers will rule in 2009. A new survey shows that the newbies, who already dominate in U.S. housing activity, will play an even greater role this year.

“Our fourth quarter random survey of HouseHunt member-agents showed that first-time buyers accounted for 65% of existing home sales – up from 46% in the first quarter of 2008 – and nearly double the normal ratio between repeat and move-up buyers,” said Michael Bearden, president and CEO of HouseHunt, Inc.

The report includes National Association of Realtors (NAR) chief economist Lawrence Yun as saying that this makes perfect sense and is not a trend that is expected to disappear, since first time homebuyers are not saddled by having a home to sell before they jump into the game.  A generous supply of lower priced homes at affordable interest rates doesn’t hurt either.

“Our latest national survey tells us that qualified first-time buyers are taking advantage of home prices not seen in five to seven years in many areas,” admits Beraden. “Affordability is no longer a major issue in many areas across the country--especially in those metro areas where prices spiked dramatically between 2003 and 2006. Sales activity today is based on the willingness of lenders to lend. Our member agents report that most buyers with good credit histories are able to qualify for mortgage loans.”

Househunt’s survey of its nearly 2,000 member agents in 47 states in the last quarter of 2008 also cites:

*  Market activity involving both first-time and repeat buyers has picked up dramatically in many areas.

* Homebuyers are beginning to close the important buyer-seller ratio gap. Thirty-four percent of respondents reported more buyers than sellers, compared to 27% in the third quarter. Seventeen percent said the ratio is about even, up from 11%. This is the first time the buyer-seller trend lines have reversed since 2004.

  * Forty-six percent of home sellers report they are getting 95% or more of their asking prices. This is down from 61% who said they received 95% of their asking prices in the previous quarter. (It may also be a sign of more realistic pricing practices.)

  * Positive price appreciation was reported by one of four sellers in the past year. This ratio is virtually unchanged from the third quarter, indicating that home prices could be at or near a market bottom in many areas