Houses are 20% to 30% off what they were last year, real estate broker says
Thanks to low interest rates, a 2009 tax credit and a market catered to them, first-time homebuyers are driving the local real estate market for the first time in at least two decades, local real estate agents said.
Many of those buyers are young and single, such as Ryan McConnell, 30, and Evan Curtis, 28. Others are young couples such as Josh and Amanda Meuwly, 25, and 22.
“It’s a buyer’s market, and we’ve been in a seller’s market for years,” said Joe Reed, a real estate agent for five years, including the past two with RE/MAX 4000.
Spend a few minutes with local first-time home buyers, and it’s easy to see that, although 2009 has brought an increased number of foreclosures in the county, the downturn in the real estate market is a blessing to others.
The Meuwlys, as well as McConnell and Curtis, purchased their homes within the past eight months.
All said they would not have been able to buy a house even a year ago.
“Homes are like 20 or 30 percent off what they were last year,” said Andrea Haitz, a real estate broker for Keller Williams. “It’s like going to the mall when everything’s on sale.”
And the Meuwlys took advantage of the sale.
When Amanda Meuwly, who works at St. Mary’s Hospital, toured a home last October, she and her husband didn’t think they would eventually buy a home in the same subdivision.
In October, the new three-bedroom, two-bathroom home she walked through was listed at about $200,000, with thousands of dollars more required for upgrades such as countertops and appliances, Amanda and Josh, a graphics designer with his 970 Productions Business, decided the home was out of their budget.
Fast forward to April, when the Meuwlys closed on a home several doors down from the one Amanda Meuwlys toured in October. It also has three bedrooms, two bathrooms and an attached garage. The difference was that the home the Meuwlys bought in April cost $170,000, with a minimal additional expense to upgrade to stainless steel appliances.
“People said, ‘I bet you’re glad you waited,’ ” Amanda Meuwly said. “We are. We got a better deal.”
They locked in an interest rate of 5.2 percent with a monthly mortgage payment of $1,100, compared with the $1,500 they were paying in rent.
In addition, they will receive an $8,000 tax credit as first-time homebuyers as part of the American Recovery and Reinvestment Act of 2009.
Evan Curtis, an employee with the city of Grand Junction, plans to use his tax credit on landscaping.
Curtis moved into the same subdivision as the Meuwlys when he bought his home for nearly $180,000 in June. The interest rate on his loan was 4.82 percent.
Curtis is still unpacking while refinishing new hardwood floors. But he has picked out a stylish area rug, framed artwork and a dining room table to give his first home a more adult feel.
“Anytime you make a large decision, you worry about it, but it settles quickly,” Curtis said while he played with his pet pug on the living room floor. “I’m happy about it. This was a good purchase.”
Curtis and the Meuwlys worked with Reed during the home-buying process. Reed estimated that 40 percent of his clientele during the past year has been first-time home buyers. Since September 2008, Haitz estimated that 50 percent of her clients, including McConnell, were looking to buy their first homes.
That hasn’t always been the case for either real estate agent, they said.
Haitz got her license two years ago but has been in the real estate business for about five years, building and selling homes. As recently as two years ago, homes listed at $250,000 or more were the fastest properties to move in the Mesa County real estate market, she said.
Since October 2008, the properties quickest to sell are listed at $200,000 or less. In fact, homes listed at $160,000 or less are “typically not on the market longer than 30 days,” Haitz said.
In a buyer’s market, such as this one in the Grand Valley, homebuyers can be pickier about what they want and how quickly they need to decide, Haitz said. In previous years, it wasn’t uncommon for multiple offers to be on the table for the same house, so buyers sometimes competed against each other.
When McConnell decided to give up his rental near Bookcliff Middle School and move into a new place last year, he specifically wanted a town home near St. Mary’s Hospital so he wouldn’t have to do yard work and so he could walk to work.
He bought a three-bedroom town home in December 2008 near St. Mary’s for $170,000.
In hindsight, had he waited one more day, he would have been eligible for the $8,000 tax credit in 2009, but he has no regrets about the process of buying a home. He locked in an interest rate of 5 percent.
“I walk home from work, and this is mine,” McConnell said.
First-time homebuyers likely won’t see their homes quickly appreciate at double-digit levels as houses have in the past, Reed said. However, no matter what home people live in, weathering the ebbs and flows of the real estate market is essential, Haitz said.
First-time homebuyers seem to understand what they are getting into financially in the present and future.
“The gratification of helping a first-time homebuyer is immense,” Reed said. “They appreciate the lender. They appreciate the Realtor. When I handed Josh and Amanda the keys to their first home for the first time, Amanda almost started to cry. They were so happy. They were so excited.”
Haitz agreed that helping buyers during the past year has been rewarding.
“Everyone wanted us to wait (to buy a home) because they were fearful of what was going to happen next,” Amanda Meuwly said. “Now, that we look back, it was the perfect time.”