"Starter Home" Shopping 101

As we know, 2017 home prices are up and posting gains of 27%. The fact of homes are posting at such gain leaves us with a small dilemma. This dilemma has created a shortage of homes. The shortage of homes has made it difficult to shop for starter homes of first time home buyers. This shortage comes into effect as builders are building higher profitable homes making them less affordable for first time home buyers. The second shortage that we run into is investors are scooping up the low priced homes with cash to either flip at a higher dollar or produce as rental income. This leaves a small range of middle class housing available. To have a home on a market one must put a home on the market. With rates low and homebuyers content, not a lot of changes are being made socially or economically making starter homes vanish.

So how does one gain an edge on a starter home? Taco Bell has the answer; "Think outside the bun". Unless you are prepared for a bidding war go above your comfort level a little since the rates are low. Many shoppers are starting down and looking up in price, so much of their time is wasted in those bidding wars. Eliminate a bidding war by looking higher and put the offer a little lower bringing you closer to your comfort level without the stress of many counters and bidding. Another great idea for a starter home is often a condominium or townhome. You can still gain just as much equity and have the added value of home ownership with more amenities, such as a gym or pool.

The best tip I have is "DO NOT SAY, THIS IS NOT MY DREAMHOME". Read more in another blog that we wrote about adding renovations to make any room bigger or brighter or prettier. But in a vanishing market you cannot expect a 100% dream home.