I want a house for Christmas. I want it in a neighborhood that’s not far from where I’m living now. I want it close to my work. I want it big enough for my family — single story is fine — with a garage, a pool, a spa, at least one fireplace, a nice sized back yard, an open concept, a big kitchen with the latest appliances, hardwood floors throughout, large bedrooms, walk-in closets, an en suite in the master….AND (whew!)…it has to be move-in ready.
Can you handle all that???
Actually, it kind of sounds like an episode from any one of a number of shows on HGTV. Personally, I love to watch the Property Brothers, Buying and Selling, Love It or List It, Income Property, House Hunters and a number of others.
But anyone who has heard anything at all about the economy in general — and the housing market “recovery” in particular — knows that, for the most part, they’re asking for a miracle, or at least it’s a severe case of wishful thinking. Especially the move-in ready part considering the current tight inventory levels of for-sale properties in many popular housing markets around the country.
The winter months — particularly during the holidays — are traditionally the slowest time of the year for the real estate industry. Realtors are busy trying to get escrows to close before Dec. 31. Homebuyers are usually busy with family and more often than not put off any property search until the New Year. Potential home sellers are waiting for the spring selling season, hoping that prices continue to rise next year.
That said, realtor.com recently surveyed 1,300 people interested in buying a home at this time of year if they can. Four key reasons for the decision were clear:
- 26 percent thought sellers would be more motivated to sell and to negotiate
- 24 percent believe home prices would be better now
- 24 percent were unable to purchase in the spring or summer buying seasons
- 20 percent thought there would be less competition from other buyers at this time of year
Putting a damper on those thoughts and dreams was the reality of the market presenting major challenges to those wannabe homeowners:
- 45 percent said there was not enough inventory within their price range
- 34 percent said there was not enough inventory on the market
- 29 percent said the weather at this time of year makes the house search unpleasant
- 7 percent said there were still too many buyers in the market
The reasons why the respondents are continuing to look are nothing out of the ordinary:
- 28 percent were looking to relocate
- 19 percent are existing homeowners looking to downsize to a smaller or less expensive home
- 19 percent are first-time buyers
- 15 percent said they are looking to move up to a larger or more expensive home
When it comes to financing their purchase, of these potential winter-time buyers:
- 13 percent are planning to put down 3.5 percent (using an FHA loan)
- 23 percent plan to put down 10 to 20 percent
- 22 percent plan to put down 21 to 99 percent
- 19 percent are all-cash buyers
Of those all-cash buyers:
- 29 percent are downsizing to a smaller or less expensive home
- 26 percent are relocating
- 11 percent are moving up to a larger or more expensive home
- 11 percent are looking for a vacation home
With the number of foreclosures — both short sales and bank-owned properties — rapidly declining over the past year, the chance of these buyers finding a true “bargain” in the marketplace is difficult at the very least considering the hordes of buyers — including investors— who are still out there vying for the same properties. Multiple offer situations are getting more and more commonplace every day.
Add to that the competition from the large institutional buyers paying too much to win out at foreclosure auctions in certain markets, plus tight lending standards that look like they’re going to get even tighter come 2014, and you have a situation that makes successfully buying a bargain dream home very close to being a Christmas miracle.
Any comments are welcome as always.