The Real Story of today’s homebuyer.
In a few short years, we have seen frenzies of buyers narrowed down to the few bold that are proactive enough to see how this market has really changed their buying power. All of this in a time and market that should keep us awake at night dreaming about our next home. We know the interest rates are at the lowest they have ever been and housing prices are soft.
But where have all the buyers gone?
For many the fear or assumption they will not quality for a home is holding them back from even starting the process. So, what does a buyer in today’s trying times look like?
Buyers Profile- You may be more qualified than you think.
Estimates to qualify for a $200,000 FHA 30/30 loan
$55,000 Annual Income
32% Housing Ratio
5 % Interest Rate
3.5 % down payment
– Someone earning $55,000 a year or $26.50 an hour full time may be qualified to purchase a $200,000 home.
– A couple earning $13.25 an hour each will also qualify.
(Other qualifications may apply but is a good starting point)
What is the Risk?
Missoula Market Conditions: One the biggest indications for the health of the Missoula real estate market is its adsorption rate or its ability for demand to keep up with supply. In a normal market 6 months of inventory is the base line. Missoula homes priced around $200,000 are at 4.93 months of absorption and performing well above an average market.
A better than average market will minimize buyer risk in terms of price depreciation and time on the market in the event they need to sell. The upside for buyers looking to be in their homes long term will be appreciation in a market segment that always has more buyers then the upper price ranges.
I know what you are thinking. If this part of the market seems stable, why is the news telling us a different story? To put it in prospective if you are looking for a home in the $400,000 – 500,000 price range the absorption rate is 22 months. If you are looking for long-term value this is a great price range but it comes with more risk and a longer time line for correction.
Can you even buy a home around $200,000?
If you have even thought about the possibility of home ownership please contacts me so I can go over your options. At the end of the day, homeownership is not right for everybody. However, I think we can all agree that in a few years we will be kicking ourselves for not looking into it. You may even be surprised how attainable it really is.“It’s A Great Life” Jeremy Williams 406-926-6767 Office [email protected]