First-time Boston condo homebuyers have a long list of priorities, many inspired by the extra time they spent at home during the pandemic. They’re excited about the prospect of homeownership, particularly in Boston and its surrounding suburbs, where the right piece of real estate can land buyers in close proximity to sprawling urban parks, historic neighborhoods, and centralized shopping and dining. But they also feel anxious and unprepared for Boston’s competitive market. According to the Massachusetts Association of REALTORS (MAR) January 2022 housing report, new listings for single-family homes are down 14.8%, and condominium listings fell 23.1%, in comparison to 2021, further straining the already limited housing inventory. And as seasonality returns, closed sales for January 2022 fell by 9.9% for single-family homes and 7.8% for condominiums.
Despite the challenges, interest rates are hovering near historic lows and it’s still a good time to invest in a home. So, how do we help buyers when inventory is low? When realtors and lenders work together homebuyers are more successful in finding and financing a home that meets their criteria.
To understand how homebuyers are approaching the market in 2022, TD Bank’s First-Time Homebuyer Pulse surveyed 1,000+ Americans who intend to purchase their first home this year.
The survey found that in a significant shift, proximity to work is no longer driving the decision about where to live, with just 31% saying “close to office/work” is a top priority, down from 37% percent in 2021. As many employers have shifted to remote or hybrid schedules, realtors can help buyers explore areas they may not have considered in the past.
After years of using their living space as offices, classrooms and entertainment centers, it’s understandable that 69% of homebuyers say the desire for more space is a motivator, up from 57% the prior year. Nearly half are looking for space for a home office and 37% would like space for a home gym. Furry friends also reign supreme with nearly half seeking a home with space for a pet, rising to 54% for millennials.
Couple those wish lists with the current market in many parts of Boston and its surrounding Massachusetts metros – low inventory, steep competition, and high prices – and it’s clear buyers will need quick, expert advice and their financing ready to go when they find their spacious, pet-friendly dream home.
While buyers remain committed to purchasing a new home, only 36% agree that now is a good time to buy, a sharp decline from 59% the previous year. Finances and the state of the economy are chief sources of worry. Seven out of 10 say they’re concerned about the economy, and 67% are concerned about their ability to afford a home. The housing market is also dampening enthusiasm, with the majority (65%) of buyers saying home prices are too high. While 35% of those respondents still want to purchase a home as quickly as they can, nearly a third (30%) are willing to wait it out a bit.
Taking action and working closely with realtors and lenders can help lessen buyers’ anxieties and set them up to be more successful. At a time when cash offers have become more common, particularly from real estate investors in Boston’s hot housing market, having a substantial down payment is crucial. Yet less than half of first-time homebuyers (48%) have started saving for a down payment, compared to 59% last year. More than half (54%) have not yet established a budget and those who have may have failed to account for the costs of home ownership, from maintenance and renovations, to condo fees, utilities and insurance.
To increase their chances of landing their new home, homebuyers should be prepared, connecting with a lender early in the process to balance house-hunting with realistic financial considerations. Still, just 22% of hopeful homebuyers have spoken with a lender, despite 33% reporting they have already started physically or virtually touring homes.
Despite wish list shifts, economic anxieties and the challenges of a competitive Boston market, the desire for homeownership is as strong as ever. Realtors and lenders can collaborate to provide homebuyers with wraparound guidance on important insight like down payment assistance programs, setting expectations and navigating the process. In this market, having a team of professionals on the Boston condo buyer’s side can make the difference between staying put in a suboptimal living situation and enjoying that dream home alongside your pandemic puppy.
Regional Mortgage Sales Manager
Ford Realty – Boston Real Estate Google Reviews 2021 & 2022
The National Association of Realtors says sales of previously owned homes rose 2.4 percent last month. Falling prices and increasing foreclosures are likely the reasons for the jump — the median home price fell 17 percent last month while foreclosure filings surpassed 300,000.
Tax breaks for first-time buyers are also helping out the market. Of the people who bought homes in May, 29 percent were first-time buyers. President Obama’s stimulus plan includes an $8,000 tax credit for people who purchase their first home before December 1.
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