Buying Your First Home in a Shifting Market

My people!! Today I want to tell the story of some recent Buyers of mine that had great success in closing on their first home. Hope you enjoy 👍🏾

Current Market Update:

So, as you may or may not have heard, the current real estate market we find ourselves in has changed. And changed quickly! Since I became a Realtor, back in 2018, I have known nothing but working in a Seller’s market. Low interest rates, low supply and very high demand for homes, created a highly competitive and fast-moving market. The perfect storm for a strong Seller’s market. Well Buyers, I am here to tell you that the market has finally softened for you! As a matter of fact, there are currently only three areas in the South Sound that are still considered a Seller’s market. Those are North Tacoma, Central Tacoma and Federal Way, and even those areas are marginally Seller’s markets.

This softening does come with the caveat of higher interest rates, which as of today are at 6.5% up the low 7%’s depending on loan type. We all knew the days of 2% and 3% interest rates wouldn’t last forever, however the velocity in which rates have increased has definitely been a hard pill to swallow. But, if your monthly payment is doable at these higher rates, and you’re ready to claim your slice of real estate pie, then let me tell you a story of recent first-time homebuyers I helped, to show you that you can do it too!

Markese and Brittany’s Story:

Markese and Brittany reached out to me this Summer, to begin their home buying journey. Markese and I went to Bellarmine together, and of course hooped for the Lions together as well 🏀 They had been living in an in apartment in University Place with very reasonable rent. However, they needed more space for their growing family, with a new baby on the way! Plus, their rent would be increasing if they were to renew their lease for another year.  Pretty much the classic story for wanting to purchase your first home! So, we got the process going for them. We started by looking at a few different options for their lending: down payment assistance programs, working with their bank, and they finally settled on a local lender! They found out that the best option for them was to use a 3.5% down FHA loan.

The fact that they were able to use a FHA loan was the first major advantage they had in this market ✅ The reality of the market six months ago, is that pretty much the only options Buyer’s had to win on a home, were to use a conventional loan or be all cash. After about a month of house hunting, the right one presented itself. It was a home they actually had sent to me very early on, before they were even pre-approved, but at that time was out of their budget. Well, guess what happened? The home had had multiple price reductions, finally falling into their budget. This was the second major advantage for them ✅

And guess what, because the home was on the market for a few weeks, the third advantage presented itself to them ✅ They were able to negotiate for $12,000 in Seller paid closing costs, take their time with their inspections of the home and keep all of their other Buyer protections in their contract. The same protections that six months ago were being thrown by the wayside. They used that Seller paid credit to cover all of their loan closing costs and buy down their interest rate, to make their monthly payment lower and more affordable for them. They were also able to utilize a very special $1,500 grant from LegallyBLACK to cover even more of their out-of-pocket expenses!

Takeaways:

I’m super proud of, and happy for Markese and Brittany, for trusting the process and taking this major step for themselves and their family. I truly believe that owning your first home is one of the best things that anyone, especially us millennials, can do to start to build wealth. It’s even more so important for black and brown folks to start owning our own shit! Pardon my french, but this is just so important to me, and sometimes you gotta say it how you feel it haha.

So to reiterate, yes interest rates are high right now, but that doesn’t mean that you can’t get what you want in a home, at a price that works and makes sense for you. The name of the game right now is to fully utilize the MANY advantages that Buyer’s possess in this market. I hope that this story has helped shed some light on what the process of buying a home can look like for you, and given you some extra confidence that you can do it too! If you have any questions about any of the topics covered here, or any of the programs mentioned (HUGE shout out to LegallyBLACK for coming in clutch!) feel free to reach out to me at any time, I’m always happy to help!! 👍🏾🏡

Jordan Cain, Realtor, Windermere Abode- (253) 882-7974, jordancain@windermere.com