David says that if the houses were good, they could be snatched within 12 hours. If they were poor, they could be snatched in 36 hours. "You spend all day on your phone looking at Zillow and Realtor.com, waiting for something to come up.
They are more or less typical of first-time homebuyers. During the coronavirus pandemic, mortgage interest rates dropped, demand surged, and prices soared.
They closed on their new home in May for $242,000. They estimate that they have spent between $15,000 and $20,000 on flooring, ceilings, landscaping, and lighting. David estimates that the house would have sold for $200,000 just a few years back.
After months of being beaten out, their agent referred them to a Christiansburg home that was still on the market. It cost $20,000 more than they had budgeted, required extensive renovations, and did not have a yard like the Taylors wanted. It had four bedrooms and was located in a great school district. The best part was that the couple was the first one to discover it.
David Taylor, 38, was not able to finish touring the homes Destiny and he were interested in purchasing before other buyers offered $20,000 or $30,000 above the list price in cash.
According to Nerdwallet’s Metro Affordability Report, first-time home buyers face a steep learning curve. They are less likely to spend as much and have weaker credit histories.
Covid-19, like many other issues, further complicated the situation. Cory Hopkins, senior managing editors of Zillow’s economic research team, said that supply was even more scarce when no one left their homes. This coincided with millennials becoming more financially able to buy a home. Many of these people have growing families and want more space while working remotely.
Redfin, a brokerage that specializes in real estate, reports that institutional investors are also making a comeback, and with a lot more capital than the average buyer. They have snapped up approximately 1 in 7 U.S. houses in the first quarter 2021.
Zillow reports that the cost of starting homes in America is rising seven times faster than renter income. First-time homebuyers now have to save 20% more each year than they did five years ago.
Many people, such as the Taylors when they buy, make concessions. Hopkins warns that not only is it about the backyard, but also on having a home inspection. This could increase costs later on.
Hopkins states, "You don't have to be in this position." Homebuyers must be patient. Wait for the right house to come up for sale in the right location at the right price.
David states that first-time buyers, at least according to the Taylors, don't like to delay the process or ask sellers for any additional information, as they fear losing out to another bidder. David also says that potential buyers may forget to stick to a budget when it comes down to it.
David states that "people will pay $60,000 more than the list price and not blink an eye." Sellers know that they will sell their house, so they do not make the house attractive or modern. Redfin reports that 55% of homes sold in July went for more than the asking price.
There is good news for anyone who is thinking of buying a home. Hopkins states that the market is cooling a little and inventory is gradually increasing. However, prices are still high. He expects that prices will grow slower than they have over the past year.
The Taylors are happy, despite the headaches and stress. David isn't regretting the decision.
He says, "We were really fortunate; we truly were." "But I won't buy a house again."
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