One of the best barometers for reporting on trends in the residential real estate market are the attitudes and actions of The First Time Home Buyer (FTHB). They are so important because they can have an impact on the entire market. That’s what happened last year when we experienced so much activity due to the Federal First Time Home Buyers’ Tax credit. It is based on a “Trickle Up Theory.” The FTHB brings buyers into the market, the homes they buy enable those owners to sell and buy a bigger home. As a result the available inventory is reduced, prices stabilize or start to increase and the market is fueled.
Understanding the FTHB’s attitudes toward home ownership is critical for all home owners and home buyers. A recent poll by Coldwell Banker Residential Real Estate surveyed FTHBs and found their attitudes about the process very positive, during a fluctuating market :
67% said the market allowed them to buy a home sooner than expected
50% said they found a home in a more desirable neighborhood than expected
61% were able to get the home at a better price than expected
40% got more space than expected
43% locked in a lower interest rate than expected
No one can say with unequivocal certainty what the future holds. That said, we know that interest rates have begun to creep up in 2011. This trend also effects the market as well. The buyers who have been on the sidelines waiting for “the bottom” may feel energized to rush the field.