First-Time Home Buyers Prepare for Best Buyer’s Market in Recent History

While affordable housing prices, ample inventories, and historically low interest rates signal ‘buyer’s market’ for investors or move-up buyers, inexperienced first-time buyers may not know if the time is right to make a move into real estate.

It’s not about timing the market, but rather about time in the market.

Once you know how long you expect to own a home, look at the historical value performance of properties in the neighborhood. Remember that the neighborhood is important because there can be huge differences in performance from area to area, (eg Woodbridge to Woodbury), and also from tract to tract, (eg Landings to Seasons).

Be confident about your own job security, down payment resources and tolerance for upkeep, as well as the lifestyle you want today and in the near term. While homeownership may not be for everyone, it is the right choice for hundreds of thousands of people.

Today’s housing market, especially for first-time buyers, makes it almost impossible not to think about the possibilities.

To help first-time buyers know if they’re ready to look for the home of their dreams as we head into this year’s home-buying season, the experts at Move have created a ‘reality checklist’ designed to help them decide if the time is right.

Get your financial house in order
Before you decide to buy a home, it’s essential to make sure your credit is in good shape and repair any damage previously done. Know your credit score: thirty-five percent (35%) of successful buyers recently reported they didn’t know their credit score when they went house shopping. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it’s important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.

Don’t fall in love with a house you can’t buy
Find out how much you can afford: establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers. Look for special loans available from FHA and government sponsored loans for first-time home buyers that reduce the amount of money required to get into a home. I can put you in touch with a few Orange County lenders who can help you.

If now isn’t the right time, prepare for your future purchase
If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.

Irvine is definitely in a Buyer's Market now

Irvine is definitely in a Buyer's Market now, with 961 homes for sale at the end of September, and only 159 sales. Of course this doesn't mean that some Irvine areas & tracts aren't in a Neutral or Seller's Market.

The number of homes for sale dropped slightly from end-August's number of 992.

If 159 homes are sold again this month, it will take over six months to sell all the inventory, assuming no other homes come on the market, and none of the homes offered for sale expire or are cancelled or withdrawn.

Here is a snapshot of the activity in Irvine during the past year.

See how sales have been dropping every month since May, and the number of homes for sale has increased every single month since December.... until now.

Is the decrease in the number of homes for sale in September the start of a downward trend?

I believe that the end-October inventory number will be lower than last month's, and I believe that the end November number will be even lower still.

Is this wishful thinking?

Well, with the holidays and elections just around the corner, I don't think so.

While I don't see a dramatic increase in the number of homes that will be sold in the next few months, especially as only 66% of our inventory are "standard sale" listings.

Is inventory is creeping up towards a buyer's market?

91 Woodbridge homes are "active" right now, ranging in price from $268,888 for a 2 bedroom short sale, to $1,169,000 for a 4 bedroom SFR with a great lake view.

49 are in "backup" or "pending" status, and 19 actually sold in July, 2010. These "sold" homes ranged in price from $299K for a 1 bedroom condo in the Laurels, to $919,400 for a beautiful 4 bedroom SFR in Landing II.

Is inventory is creeping up towards a buyer's market? If you look at this chart of active vs pending vs sold homes in zip codes 92604 & 92614, you'll see that inventory is the highest it's been in at least a year.

Sure, a bit of 92614 is in other areas besides Woodbridge, but you'll agree that inventory is rising!

The next few months will be an interesting time, with affordability at an all-time high, and prices at the bottom of the new upswing.