Friday, November 21, 2008

First Time Buyers Back in Chicago

I've recently been contacted by a score of first time buyers. In September, I had predicted around the office that the first time buyer would be a strong market segment as prices have stalled or lowered and as the occasional "cut and run" opportunities present themselves.

Then earlier this month the National Association of Realtors reported that first time buyers made up a larger percentage of purchases. Man... I'm smart.

From the story:
"The number of first-time buyers rose to 41 percent from 39 percent of transactions in last year’s survey and 36 percent in 2006. “Although modest, this is a meaningful gain for the 12-month period ending at the close of June, and more recent independent data show a stronger uptrend in first-time buyers who are helping to reduce excess inventory,” Yun said."

What's important to understand here is I've been very successful working with first time buyers because I meet them here on my blog and face to face at the many open houses I host.
If you are thinking of selling your place, it's important that you list with a Realtor who reaches the buying consumer in many different ways.

I've recently started working with several clients looking for condos under $300K. They feel they can finally get a decent, affordable place. This will be a terrific market segment for me in 2009 as I've been in every condo in Chicago under $300,000! Almost.

I'd estimate 30% of my sales over the last three years have been condos from $250,000to $350,000.


kbr7171 said...,0,3445948.column

"But many first-timers...bought with no money down—34 percent of all first-time buyers financed 100 percent of their purchases. (Among all types of buyers, 23 percent purchased with 0 down.)"

Eric Rojas said...

Thanks for reading...kbr7171
Although your comment here provides no context here specific to price points, location etc..., I read this story and thought it was surprising. Those I've been working with in Chicago up to $350K have been either minimum 10 percent down or, if utilizing an FHA loan with 3.5% down, have been buying at $225K or less. These are very manageable payments and debt loads for a primary home.
I don't know where nationally these buyers in the Tribune story got the zero money down this year.
However, let's say they bought a three bed, two bath family home somewhere for $150-200K with zero down. So what? I wish I was mortgaging only $150K!

If your point is some people don't learn, fair enough. However, each purchase is unique and in this environment I would bet the zero percent down purchases were at better debt ratios and incomes.