Consider this a collective “thank you” from the rest of the country to all the first time home buyers over the past few years, and the future first time home buyers in the next couple years.
Why?
Well, in recent years (at least in Minnesota) a large percentage of the market has been comprised of people buying their first home. Not the traditional “move-up buyers” who are selling their current home and buying another house, in most cases at a higher price point. Nor the “investor buyers” who are either buying distressed houses to fix them and sell them for a quick profit, or renting them out as long term investments.
No, the largest portion of home sales since 2008 have been to First Time Home Buyers in MN. The biggest reason for this is because most current homeowners owe more on their houses than they can sell them for in the current housing market. So, these new homebuyers have the luxury of not having a home to sell in these tough economic times, and they are taking advantage of the low home prices and mortgage interest rates.
And for that, they deserve thanks. Because they are almost single handedly going to (eventually) bring the United States out of the current housing market and economic slump.
You see, what the real estate industry needed back in 2006 was a “Reset” button to be pushed. Prices had gotten so out of hand, and lending was permitted to buyers who had no business purchasing homes that something drastic needed to happen in order to preserve the housing market for the greater good.
While many people see the past few years of housing decline as a curse or an abnormality, I see it a necessary evil. I personally feel terrible about people who have lost their homes to foreclosures and short sales, and for the hard-working American who was a victim of predatory lending practices in 2000-2005. But looking at it from a “big picture” standpoint, I am very glad that so many new homebuyers are able to lock in low interest rates and purchase their first property in a price range and they’re comfortable in–with no string attached.
After years of hitting the “Reset” button, we will come out of this mess together, and hopefully we will all learn a few lessons along the way.
For now, when you see or talk to a person looking to buy their first home, thank them for helping us all get through these tough times. History has shown us how powerful First Time Home Buyers can be in bringing back the economy from recessions in the past, and once again we all owe them a pat on the back and a smile for their willingness to take action and take advantage of a golden opportunity like we have today.
There certainly have been so many great purchases made by first time home buyers here in Minnesota. Still however there are some great listings for sale on the minnesota mls. I always encourage buyers to plug in with a top real estate agent to help them search for properties. Cheers!
I could not agree more. The market crash was inevitable. Housing prices were outrageous in 2006. Just about anyone could acquire loans on houses listed exceedingly high and it is the lenders fault allowing it to get out of hand. If they laid down a stricter set of rules in the early 2000′s with a specific limit according to income, homes could not have gone up further because buyers wouldn’t be “qualified” to buy them at that price.
Thanks for your note Steve. I have worked with a lot of first time home buyers over in St Paul. So many great purchases! A number of them did pick up some condos at outstanding prices. Thanks again!
Still going strong–keeping the housing market humming along, and avoiding a full-on collapse! Way to go!