First-time buyers aren’t just being priced out of hot markets, they’re facing aggressive competition from people with deep pockets.
“It’s challenging for first-time buyers (in hot markets),” Brian Quigley, an originator with The Mortgage Network, told Mortgage Professional America. “Sellers are increasing prices beyond what homes are even worth, which attracts a lot of cash buyers.”
And those cash buyers are easily able to outbid first-timers who scrape together down payments.
Quigley has noticed an up-tick in competition in his home market of Denver, CO, which was just named the hottest housing market in 2016 by Zillow.
The median home value in Denver is now $327,400, an increase of 14.2$ year-over-year change. That upward trajectory is expected to increase 4.6% this year.
However, there is hope for originators working with desperate first-timers – even in competitive markets.
“It’s important to have a solid connection with real estate agents,” Quigley said. “Working on your referral list of Realtor partners is important.”
Having a solid referral base gives originators – and, of course, agents – a leg-up on the competition. After all, both sides of the home buying equation are necessary, and agents are connected to the market in a way that will allow originator clients more access to potential homes.
Booming housing markets are leaving first-timers out in the cold according to one industry player who is sharing his tactic for helping those buyers.