As the trend plays out, first-time homebuyers, who tend to rely on financing for their purchases have been getting squeezed.
Christy Budnick, executive vice president for the Jacksonville, Fla.-based Berkshire Hathaway HomeServices Florida Network Realty, says that she’s seen a lot of first-time homebuyers come in with offers that are a bit low because they think sellers are desperate. Unfortunately for them, the market has turned to the seller’s favor and multiple offers are coming in – often sparking bidding wars that leave the mortgage-bound bidder out in the cold.
“Some of the first-time buyers unfortunately lose a few homes before they find one that they can get under contract,” Budnick explains. “We try to educate them.”
Budnick, whose company generates about 3,000 transactions in Northern Florida each year, says that many first-time buyers do not anticipate all the competition and believe they can get a property by coming in under asking price. To convince them, she says she shows her clients how drastically the days-on-market data has shrunk to “almost nothing at certain prices ranges.”
“But the buyers still have it in their minds that they’re going to get a deal,” says Budnick. “They have to go through a couple losses to realize that.”
Andrew King is an award-winning journalist with 15 years of experience with the Gannett newspaper company, appearing in The Journal News (Westchester, NY), Asbury Park Press and USA Today. He also contributes to The Real Deal, TheLadders.com and TechPageOne.com.
