First-time buyers dip as housing market costs rise | latest news

Sydney Schuller (Charlottesville) Daily Progress

First-time homebuyers are leaving the Charlottesville market as sellers adjust to a more cautious buying style, according to the Charlottesville Association of Realtors’ second-quarter report of the area’s real estate market.

Association officials said the CAAR report, released August 3, reflects a shift in today’s housing market that reflects the entire country.

Buyers are leaving the entire Charlottesville market in search of smaller markets with a larger inventory of affordable single-family homes.

In the most recent quarter, Nelson County saw a 49% increase in sales, according to the report.

CAAR officials say the natural solution when the housing market cannot meet a buyer’s needs may be to rent until the market stabilizes. In Charlottesville, that simply isn’t the case, at least for the time being.

People also read…

“One of the things that may alleviate some of the affordability issues in the future is the fact that building permits for multifamily homes and duplexes so far this year are up 61%,” said Pam Dent, CAAR President. “We have to remember that it may be a year or more before these properties are put on the market.”

As Virginians continue to recover from the labor market crash caused by the pandemic, buyers are now taking more time to consider the inflationary effects. Unemployment stood at 2.7% and 30-year mortgage rates increased 5.5% last quarter, officials said, leaving buyers wondering if they’re shopping in a recession.

The reality of aggressive inflation is causing buyers to pause their search or leave the Charlottesville market altogether, the report notes and CAAR expects lower inflation to have a domino effect that will also lower loan interest rates and mortgage rates.

The higher the inflation, they said, the longer it took buyers to buy a home.

S said. Lisa Hendon, President-Elect of CAAR: “Some buyers, usually at lower to mid-price points, are stopping their research or changing their expectations.” “It is important for them to talk to their lender because they may not be able to buy the house as much as they were eligible for two months ago. Their payments will be more.”

As mortgage and living costs go up, home prices go up, too. According to the report, the median home cost in the city during the second quarter was $464,000, an increase of 11 percent, or a jump of $44,000 since last year.

Buyers looking for homes in the $350,000 to $450,000 price range exercise extra caution about finding a spot in the Charlottesville market. Fewer purchases left more active listings in the market than usual.

Today, there are 163 more active listings on the market, up 28% in inventory since last year. But while there are more homes available for purchase, they aren’t affordable, according to CAAR.

“Some people have to adjust their expectations,” Hendon said.

Officials said that while buyers are taking their time rather than rushing to buy a home that doesn’t match their preferences or budget, sellers should also change. Many homes in the city remain on the market for longer due to prices that make their listings very high. However, some sellers take full advantage of buyers with big budgets.

“We’re still in the seller’s market,” Hendon said. “There are still buyers in the market but they are more cautious, so it may take longer to sell the house.”

%d bloggers like this: