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As prices rise, first-time buyers come up short

Posted by Scott Van Voorhis July 25, 2013 08:02 AM

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First-time buyers were kings back during the real estate crash and Great Recession, courted by desperate sellers looking for someone, anyone, to make an offer.

With no house to sell in a depressed market, first-timers were free to peruse the listings at their leisure and haggle for the best price. Ah, those were the days.

But with home and condo prices mounting rapidly, first-time buyers are finding themselves shoved rudely to the sidelines, sometimes unable even to get their bids taken seriously.

We are now in a seller's market, and suddenly cash, equity and big down payments are the order of the day.

And suddenly, first-timer buyers - and for that matter anyone out there trying to buy without a substantial down payment - are finding themselves being dismissed as lightweights.

"Anyone who has (just) five to ten percent down, they have gotten creamed," Sam Schneiderman, president of the Massachusetts Association of Buyer Agents, told me. "People don't even look at those offers realistically."

Of course, the winners in this power shift in the real estate market are the mover uppers.

They were close to becoming an extinct species back during the bad days of the market, unable to sell their homes and passed over by sellers in favor of first-time buyers.

But now, with prices rising again, some mover-uppers are finding they can not only sell, but also get a decent enough price to put a substantial sum down as well.

That's putting the squeeze on the first-timers, who have seen their share of the market drop from a high of 50 percent in 2009 down to 30 percent today, The Wall Street Journal reports. That's well below the historical average of 40 percent.

And this shift in fortunes is especially hard for first-time buyers in Greater Boston. This has long  been an expensive housing market to get a start in and suddenly we are seeing double digit increases in some towns.

First time buyers, how's it going out there? What's your story? Don't want to comment?

Then Email me at sbvanvoorhis@hotmail.com.
This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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