Long Beach Home Ownership - 1st Time Home Buyers and The American Dream
14 comments »LONG BEACH REAL ESTATE
First Time Home Ownership
Back in the Spring of 2005 a young couple, Maria and Richard, contacted me. They were very excited and were about to purchase their very first home in Long Beach.
A young family, they had struggled to save $10,000 in order to make their dream of home ownership come true. Their lender told them they were qualified to $325,000 with 100% financing. They weren't looking for something above their means, just a nice little home in Long Beach with a yard they could work on and infuse love into; a place to raise their family.
Maria and Richard shared a vision of their children playing in the yard, while Mom looked on through the kitchen window and Dad used his skills to improve the home. Still an attainable dream, at that time. We sat down and went through the available homes on the MLS together and discussed possible Long Beach communities they could afford; there weren't many, but this was still possible. Prices were going up rapidly, they had to find a home and make an offer quickly or they would be priced out of homeownership forever. There were only a small handful of homes in Long Beach still in their price range, the pickins were slim.
Downtown Long Beach was the last vestige of affordable homes at that time, so off we went, with just 3 homes in their price range. 2 were really yucky, we passed on them immediately. The third was a lovely California Bungalow with the yard of their dreams on a corner lot. This was a real find, priced at $325,000, the top of their range, and it was in fairly decent condition. All of the original craftsman woodwork was intact, the floor plan was great, it was the perfect size and it was available. Richard wanted to look around a little more so back to the MLS we went.
With no other homes in Long Beach available in their price range we decided to search duplexes for them. Off Maria and I went to drive by the candidates. They were awful! The bungalow was still available, Maria and Richard really liked it but still wanted to shop. Problem, there was nothing left to show them in their price range. The least expensive home in Long Beach at that time was $350,000, out of their range, and not as nice as that California Bungalow.
Over the 3 weeks that we were looking around prices were escalating at a frightening pace, if they didn't buy in the next week or so they would only qualify to purchase a condo, home ownership in Long Beach was moving out of their reach. Maria called and instructed me to write an offer on the cute California Bungalow they viewed the first day out. It was gone and had been bid up in multiple offers. Nothing decent sat on the market at that price for very long, the market was sizzling hot. They had been priced out of the market forever. Maria was heartbroken.
We talked about a possible condominium purchase, but the yard was Maria's dream. Richard dreamed about tearing out walls and ceilings and using his talents to create a home for his family. A condo did not fit their dream and they needed to stay in Long Beach. They still live in a rental apartment without a yard today.
There were many 1st time home-buyers on the market in the Spring of 2005, most in the same price range as Maria and Richard. They were all priced out of purchasing Long Beach homes simultaneously and all descended on the available condos in Long Beach at the same time. Condos sold as fast as they were placed on the market, most in multiple offers, some had over 35 offers on them. It was wild!
Over a period of about 2 months condominium prices in the Downtown Long Beach area alone had been driven up by about $100,000 per unit, it was incredible, the fix and flippers were having a field day. Fix and flippers were offering over market, waiving inspections and appraisals, grabbing most of what was available, doing a fast makeover and re-selling them as fast as they could purchase them. Their offers were irresitable to sellers. When the buyers couldn't afford to purchase their lenders made arrangements for stated income loans and purchase they did. Appraisers were bringing everything in at purchase price. It was like everybody was on drugs or something. I have seen the same buying frenzy on Ebay auctions. Some people have to win, they don't care about overpaying, they just have to win.
2 bedroom condo prices had leaped into the mid $400's. This was too much for 1st time home buyers to pay, but pay and buy they did until they were priced out of the condo market as well. 1st time homebuyers could no longer purchase a Long Beach home or a condo.
These same condos are now on the market and can be purchased in the low to mid $300 range, with a few even lower. What does that tell you? It tells me that it is a 1st time home buyers market right now.
Have you been dreaming about home ownership? Now is a great time to buy your first home. If you purchase a condo now you will gain appreciation at a more normal rate over the next 5 years as the market straightens itself out. Approximately 5 years from now you should be able to sell your condo, take your earnings and buy that Long Beach home with a yard.
Home ownership is the American dream. What's your dream? What are you going to do about making that dream a reality?
Call Laurie today to begin your Home Search (562) 212-5420
| Laurie MannyLong Beach Realtor (562) 212-5420 |
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Main Street Realtors Belmont Heights 244 Redondo Avenue Long Beach California 90803 |
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· http://www.jfivehomes.comLaurie - I have seen this scenario played out time and time again. But as you rightly pointed out there is an opportunity now for First Time Buyers to get in the market now that property price is dropping. With mortgage not as easy to obtain the Realtor and mortgage broker need to work closer to identify the right mortgage product to help these buyers realize their dream.
Permalink August 18, 2007 07:10:33 · http://www.longbeachrealestatehome.comThis was a heart wrencher. What a shame for 1st time buyers to miss the opportunities in today's market. You are right, while mortgages are tough, they are attainable. This is a dream that can happen.
Permalink August 18, 2007 07:13:47 · http://activerain.com/missycaulkAre the condo's all that came down ? Not the home prices ? I'm sure you'll find them something, Laurie.
It is a great opportunity for first time home buyers.
Permalink August 18, 2007 07:29:03 · http://www.longbeachrealestatehome.comHome prices have come down also, but 1st time home-buyers qualified for under $400 are not able to stretch the purchase price high enough for a home. They can however purchase a great condo now, where they could not before.
Permalink August 18, 2007 07:41:50 · http://www.theblogthatatemiami.comLaurie, these stories are heartbreaking and altogether too common. There is definite opportunity out there right now. I hope this young couple takes advantage of your sage advice!
Permalink August 18, 2007 09:51:45 · http://www.longbeachrealestatehome.comPermalink August 18, 2007 13:09:02 · http://beachcityrealestateinfo.blogspot.comWhen looking at the overall market in the LA area Long Beach has some of the best buys around. Smart buyers will take advantage of lower prices and plan to plant themselves for at least five years.
Permalink August 18, 2007 20:47:08 · http://activerain.com/gsoutoLaurie, there is a good and bad in every market condition. Thing are either bad for the Buyers, or they are bad for the Sellers. Our job is to be able to get people into homes in what ever condition exists at the time.
Permalink August 18, 2007 21:46:11 · http://www.longbeachrealestatehome.comPermalink August 18, 2007 21:55:54 · http://www.longbeachrealestatehome.comPermalink August 18, 2007 21:57:38 · http://www.ChrisTesch.comLaurie, it's awesome that first time homebuyers won't be out in the cold now!!! A healthy market is where just about anyone can afford basic homes!
Permalink August 19, 2007 00:07:57 · http://www.PopeHandy.comLaurie, I have had a few stories like this too. The ones who don't buy fast enough in a quickly rising market make a permanent decision by virtue of stalling. It's VERY sad to see. I have a few that never bought too.
Hopefully those folks will take advantage of the current market and not "wait until it hits bottom" - after which it rises fast all over again.
Great post!
Mary
Permalink August 19, 2007 00:59:29 · http://www.longbeachrealestatehome.comI agree, it is great when the market can accommodate 1st time home buyers.
Permalink August 19, 2007 02:01:52 · http://www.longbeachrealestatehome.comI never forgot this couple. I felt so bad for them. Maria would call me on and off every few months and just cry. This market won't help this couple, they could afford a condo right now, but the dream of a house is probably over, unless their financial situation changes. I doubt the market will go back to that level.
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