First-Time Buyers Face Challenges Entering the Orlando Housing Market
As surprised as some might be, Orlando’s housing market is at very affordable level historically speaking. Interests rates are at a comparatively low level which should make this an attractive opportunity for buyers in the area. However, reports show that the Florida real estate market poses a challenge to first time homebuyers. They have not had the easiest time purchasing a home in the Orlando Metro area.
The National Association of Realtors claims that first-time buyers only accounted for 26 percent of recorded purchases during the month of January. That’s a 1 percent drop from the end of 2013 and 3 percent drop from last January. This is the lowest level it has been since late 2008.
(Traditionally, the percentage of first time buyers accounts for around 40 percent of the given housing market.)
What Could Account for this Trend?
The Orlando Regional Realtor Association thinks it is the result of 4 primary market factors:
- Tighter credit limits
- Limited housing inventory
- Rising home prices in Orlando
- Higher mortgage interest rates
The housing market inventory has been growing in Orlando over the last few months, but there is a veritable “drought” of homes in the affordable price ranges for the average first time homebuyers. Cash home sales in the area have also kept competition up for the entry-level homes that are available.
Additionally, restrictions on credit have become much tighter which is preventing even more qualified first-time buyers from getting the funding they need. Outstanding student loan debts are also a growing concern amongst this demographic of homebuyers. One recent survey showed how 54 percent of interested first-time buyers listed their student debt as the reason
they couldn’t afford the down payment on a home.
Some Good Advice for First-Time Buyers
Looking at all these factors, and it shouldn’t come as too big of a surprise that more and more in this demographic are growing uneasy over the prospect of finding the right home. This is where a team of real estate professionals can advise prospective buyers on the steps they need to take to succeed. Here’s some free advice to get started:
- Know your purchasing power. First-time buyers should have a firm understanding of what they can afford before they begin the home-searching process. This will include an in depth analysis of your current credit ratings, savings, and annual income. You’ll also want to have documentation on your income and available cash before entering the mortgage application process. Be sure to include costs like insurance, taxes, and utilities during this total budget calculation.
- Know what you’re looking for before you start. If you’ve gotten your desired loan, then you can start laying out the things you are looking for in a home. Think about the number of bedrooms/bathrooms you’re looking for, kitchen layout, or community amenities you’re interested in. Today, there are a variety of realty sites that can provide you up-to-date information on the local housing market and homes in your price range.
- Consider working with a Realtor. Some people really like doing most things on their own, and we can respect this DIY attitude. However, searching for a dream home can be a complicated process that will be that much smoother if you work with a qualified Realtor. These knowledgeable professionals will:
- Review available listings with you
- Provide counsel
- Negotiate with the seller for you
- Show you around the homes you’re interested in
- Provide a focus filter to keep you on track
The current housing market situation means that many interested first-time buyers are weighing their options and plenty are still choosing to rent instead of buy. We’ll be tracking this trend over the next year, but hopefully we’ll see that number start to improve soon.