Two Challenges Await First Time Home Buyers in Denver

If you are a first time homebuyer thinking about buying a new home in the Denver area this fall, you face a couple of interesting challenges.

The most obvious is the $8,000 tax credit, which has brought 1.2 million buyers in the market, according to the National Association of Realtors. That is expiring soon. Unless you have a deal in progress, it is almost too late to use the credit if you want to have your sale closed by the November 30 deadline. Now, after months of talking about extending the credit, there is serious discussion underway that may result in an extension. (On October 13, the House already approved an extension for military personnel who served abroad for 90 days in 2009.) If the credit really is what makes the difference for you, your decision is whether to start the process now, with the extension uncertain.

The second issue is more of a concern. If you are like most first time buyers, you are likely to be shopping for a home priced more towards the lower end of the spectrum - typically $200,000 or less. Because of the rush of buyers, the number of homes in this price range have decreased.

Actually, local housing stock has decreased; of 20,225 homes on the market in August, 2009, 19,834 remain- compared to 23, 923 units last September. In September, sales also declined 9.8% since September 2008 and 1.05% since August 2009. The decline may reflect the usual September slowdown, as families tend to align their moves with the school year, now in full blast.

Prices, meanwhile, are moving up. On single family homes, the average sold price of $274, 433 is 5.5% higher than last year. The median price of $225,000, which does not reflect the highest and lowest prices, is 4.09% higher than in September 2008 when it was $216,500. Meanwhile, condos sold with an average price of $168,288 and a median price of $145,000 in September, up 3.65%. All this means that "move-up" buyers, perhaps buying their next home, are starting to get active too. Sales in the price range often sought by this group - $200,000 to $300,000 - have increased.

This state of affairs may put you out of the running as a first time homebuyer right now, if the prices of available homes are more than you can pay! You obviously don't want to get in over your head.

In either case, this is a great time to call Bandy Homes, where we are committed to finding you an affordable home. We will, first of all, discuss your options and, perhaps, bring in our lending partner to see if one of the options they have available would make home buying feasible for you at this time. We will also show you appropriate homes that meet your needs in Aurora, Centennial, and other fine communities in the Denver Metro area.