Our take on how to navigate a housing market that looks bleak.
On February 11, 2019, Realtor.com published an article entitled Revealed! These Are America’s Most Unaffordable Housing Markets. In the article, our very own Carson City made the list at number 10 where, according to the article, the average person spends 24.6% of their yearly income on housing.
For locals, we know the reasons housing has become so expensive. In fact, most people know them so well they could put their local Realtor to shame with their analysis.
Fine. So what can you do about it? Affordable new construction is barely on the horizon and resales keep going up and up in price. While we don’t have a blanket answer as to how to fix affordability, this is our attempt to provide some strategies to any potential home buyer looking to make a purchase in the near future.
1. Build your Team
Even if you think you are months or even years off of purchasing, it’s important to start cultivating relationships with those people you are ultimately going to trust with the purchase of your home. Find a good Realtor and let them introduce you to the people they do business with. Meet those people. Ask lots of questions and express your wants and needs openly and honestly. Do everything you can to be prepared for when you are ready to purchase. Ask your agent to give you market alerts so that you can see how housing is trending and how far out from purchasing you might be. This is your opportunity to prepare yourself so that when things become more favorable for you to be, you don’t feel like you are flying blind.
2. Be Wary of What You Read Online…
If a sucker was born every minute for P.T. Barnum, what would he do with the internet at his disposal? Every day we field calls from potential buyers who have read or seen something online and most of the time, the information is designed to lead customers astray. This is frustrating for buyers who get their hopes up about an opportunity, and doesn’t feel great as a Realtor who has to deliver the bad news that a “Pre-Foreclosure” doesn’t mean anything except the home owners missed a mortgage payment. Question what you read and run it by your Realtor. We can see the puppeteer pulling the strings and can do a great job of separating the real information from the scammers who just want to take advantage. In a tight market, there are no steals. Competition is high and generally those entities with deep pockets (flippers, investors, etc.) are looking for a deal too. Good information leads to good decisions. Good decisions bring peace of mind.
3. Meet with your Lender
If you are planning to get a loan to purchase your home, it is CRUCIAL to meet your lender face to face. Believe it or not, the type of loan you are getting may make or break your purchase, and if you aren’t working with a lender you trust, you are putting yourself at a disadvantage. Your lender should be someone you can get ahold of when you need questions answered. They should be able to explain different packages and options to you. They should (and legally must) break down all the costs associated with the loan and why those costs are there. You are borrowing a considerable amount of money from this institution. It’s important that you like their representative and how they conduct business. And most of all, it’s important that they know who YOU are and what you need from a home loan. You want someone with experience, someone who puts a personal touch to their business and someone who will have the answers when your lending questions come up. And if you aren’t ready to buy, many lenders work with credit-fixers or other financial consultants who can help you get in the best position for a home loan.
4. Make Home Buying the Priority
It takes a really long time to save money, especially in a day and age where you get daily emails with shopping specials and social media whips us into a buying frenzy. This is not one of my strong suits. It requires a level of discipline most of us don’t naturally have and certainly a level of discipline not encouraged by our society. In Carson City, residents spend approximately a quarter of their income on housing (Lambert). With that in mind, saving may seem like an impossible task. If you want to buy a home and are really serious about it, you have to make it a priority. Save as much as you can from each paycheck. That saved money will translate into a larger down payment for your loan which means more equity in your home and hopefully a lower mortgage payment. Instead of taking a lavish vacation, spend quality time locally with your loved ones instead. Would you rather take a selfie on the beach in Cabo or from the living room of your new home?
5. Don’t Give Up.
You have to be tenacious, hungry like the wolf. You need to trust that if one house doesn’t work, another will. They only buyers we don’t find houses for are the ones who, for whatever reason, choose to stop looking. Be open to different areas and learn to see past bad photos online and a particular seller’s personal design quirks. You should still be picky as to what you want and need for a home, but you may need a little imagination to see how you can fit in a particular space. Our Northern Nevada area is changing every day and with that change may be the perfect home for you. There’s an old Lebanese saying my Mom brought out every time we worried about finding our romantic “the one”: every jar has a lid.
