This was originally posted this morning on Real Estate with Realtor® Rod
The bottom line is that buyers can still find some properties in good shape under this thresh hold. In close to the city, here in Vancouver, these will be fixers or really small houses. In the outlying areas such as Washougal and Battleground there are still opportunities for a decent sized home around 1100-1400 squares either modern and attached or older and detached. Many of these properties will qualify for a variety of financing options. Buyers need to be aware that most of the government sponsored loan products, FHA, VA, USDA, etc. have requirements that may exclude a “fixer” type house. There are other programs designed specifically for fixing up a troubled house, those a bit more complex and buyers should consult with a qualified loan officer about how they work.Here in Clark County, Washington the housing prices have been robust. Maybe just a little too robust, but none-the-less homeowners that were once underwater to the bank are now finding themselves free to sell and move up or down as the case may be. Interestingly enough, sellers are sitting tight on their homes, and this has created a flush demand for entry to mid-level homes locally.
The $200,000 dollar price point is beginning to vanish in this market. Sure there are fixers and super tiny homes as well as condos and townhouses, but the single family detached dream is getting tight at $200k. I have a young man interested in buying his first home. He is looking to keep it around $200k and wants to use the USDA lending program. This loan program is designed to serve rural areas but there are a few here in Clark County.
This entry level housing market is almost always in demand. During the recent hard recession (2009-2012) I sold a great deal of homes in the entry level price range. The tough market conditions created a whole new class of buyers in a much more modest income bracket. Back then, I wrote articles about two minimum wage earners qualifying to buy a real house! These buyers are now sitting pretty with a nice chunk of equity in the homes they paid $125-150k for now valued at $200-250k.
The entry level buyers are the most vulnerable during an upswing in values. They can easily be priced out of the market by either rising home prices or rising interest rates. The whole new class of buyers I mentioned above are already priced out of this housing market. The window has closed locally for two minimum wage earners to buy a detached single family. Buyers in the higher prices ranges may not get priced out, but they can get priced down, meaning they may have to downsize the dream if they sit on the fence too long.
Sellers are in a prime zone right. Selling in the middle of an upswing can be good for the move up housing market. Sellers can let that entry level home go, use that equity to buy up to the larger home and still enjoy some market appreciation. Waiting too long, like people did in 2007-08 can result in being “stuck” for a few years when the market dips down. In my book ‘Don’t Panic’, the whole theme is to buy low and sell high. We are running slim on the buy low opportunities so don’t sit on that entry level house much longer. Sell it and grab your new house while their is still strong upside potential on the value.