First Time Home Buyers: Managing Expectations

As rates continue to ride the roller coaster, First Time Home Buyers are challenged with having proper expectations related to the type of homes available and the value one can get for the money.  In the Savannah area market of Chatham, Bryan, and Effingham Counties, First Timers tend to shop in the “up to $150,000” price range.  Based on current mortgage rates and typical insurance and property tax expense, a home at the top of the range would translate to an $1100/month mortgage commitment.  The average price of July sales in the First Timer price range was $96,722 and is equivalent to around $800/month, far surpassing the affordability of most area apartments offering smaller spaces and fewer notable home features.

 So, what can a First Timer expect to buy?  In July 2013, there were a total of 161 sales of homes (32% of all sales) up to $150,000.  The typical home profile:

 

# Bedrooms	Three
# Baths	Two
Average Square Footage	1426
Average Sales Price	$96,772
Average Price/SF	$68.30
List Price/Sales Price	96%
Average Days on Market	84

 

As one would expect, the “under $50k” group were foreclosures needing fairly significant work.  Occasionally, a good prospect for the stalwart First Timer will arise.  Generally speaking, though, most First Time Buyers use either VA or FHA for financing.  VA does not have a repair escrow option; the FHA loan type does, but the process is often daunting for buyers who are more experienced.

The majority of the second category of “$50-75k” were fixers as well, but the upper end of the range included move-in ready homes in nice neighborhoods.  Above $75,000, the choices were abundant and included move-in ready re-sale properties as well as new construction.  A wide variety of styles were available as well.

The bottom line? Homes are still affordable in the Savannah market.  Getting a bargain does not mean that the buyer has to be a hard-line DIY-er.  However, taking advantage of the market in the entry price level does require a sense of urgency and a set of reasonable expectations.  I’d be delighted to walk you through the process.