Whether you’re ready to drop major $$$ on your first pad or have been budgeting to move from renting to owning, we’ve got the Scoop on what you need to know from the people who know it best – the Realtors® at Helen Adams Realty; they have you covered with offices all over the Charlotte region.
First-off What’s the Inventory Situation for First-time Homebuyers?
One of the many ripples of the pandemic was a mind-shift that made remote work the norm, which in turn opened up the opportunity for some to live and work wherever their budget could move them.
Charlotte was at the top of many people’s home-office relocation list, which contributed to an already wild ride for the real estate market – especially for first-time homebuyers.
While all signs point to things beginning to level out in 2023 – we asked the experts about the current inventory:
Realtor® Lizz Baxter, from the Ballantyne office said “Overall the inventory for buyers in Charlotte is historically low, so buyers must make quick decisions and be pre-approved.”
Being prepared and pre-approved is good for most situations in life; Realtor® Anne Carroll Mascavage from the Randolph Road office noted “Inventory at the end of 2022 had doubled compared to the end of 2021, but with only 1-2 months’ supply, compared to a healthy market with 6 months’ supply… this makes the market more competitive as there are more buyers than homes available.”
Scoop Notes:
• Slow but steady increase in inventory
• The market is still hot, but there is time to walk through a home and make a decision
• “Buyers have more power than they did a year ago,” Realtor® Grissell Alegria, Lake Norman Office
What’s an On Point Price for a First-time Homebuyer?
A desire to get the best bang for your buck isn’t exclusive to the real estate industry, but knowing your ‘real-real’ budget can make all the difference in deciding if now is the right time to buy your first home.
Realtor® Holly Achenberg from the Fort Mill office says “I have first-time buyers who are looking in the $200 -250,000 range for a townhome, as well as $350-400,000 for a single-family home. The market is challenging in these price points more than ever with tight inventory and lots of demand!”
Anne Carroll who helps first-time buyers in the $250,000 – 500,00 range agrees and adds “Condos and townhomes are desirable in this price point and help ease the first-time home buyer into the market with the HOA covering many maintenance issues that arise.”
Scoop Notes:
• Know what you can afford
• Be realistic about what your money can buy
• Being pre-approved is good
Zoom-in on Best Zip Codes for First-timers
Charlotte is well known for its ever-changing skyline and variety of neighborhoods. From farms and lakes, to craftsman and colonial you can pretty much find it all.
You need to know your budget and lifestyle must-haves but also what is a no-go for you, and often that that decision is brought to head via location.
“Location is a preference and based on the client’s comfort with affordability. I follow the buyer’s lead in this regard, and encourage drives through the areas to make notes of mature tree canopies and convenience to hobbies, offices, activities that fit their lifestyle and proximity to friends and family,” says Lizz.
Once you decide on how you want to live you can choose where you want to live.
Anne Carroll recommends, “For single family homes, I think Starmount, Windsor Park, Sheffield Park, Sardis Woods and Heritage Woods are all great areas. These areas are close to center city Charlotte and will continue to see big growth and price appreciation as Charlotte grows outward. These neighborhoods are filling up with young adults as older generations move out. I also believe the Camp North End area of town and Enderly Park are rapidly growing and if you can grab a home in there before they take off, it would be a great investment! “
If you’re a growing family or looking for a little room to run Holly says “My clients are widening their search range to Rock Hill, Clover, and Lake Wylie, as well as Gastonia, Belmont, and Mount Holly.”
Grissell says there are many suburbs that offer the best of both worlds with big backyards and a happening main street stating “For backyard space – University City area. Kannapolis and Concord offer affordability and thriving downtown communities. Belmont, one of my favorite locations, offers proximity to Charlotte and the airport. Charlotte also offers pockets of neighborhoods like Oakhurst, Wilmore, and Plaza-Shamrock that are (hidden) gems.”
Having a trusted relator guide you who not only knows the local market but can empathize with the first-time buying experience is essential.
Holly’s personal first-time buying experience helps her steer her clients to see what may be possible. “My first home was purchased for $220,000 in Los Angeles, CA in 2002. It was not what we had initially been searching for in terms of location, but we were priced out of where we wanted to live. We made the compromise because we were looking for a 3 bedroom/2 bath to live farther away and be in an area that was ‘up and coming’. It was rough at first, we were one of the first to move into the area and it wasn’t 100% the safest location. We stayed 2.5 years and were able to take advantage of the changes in the market and sold for $499,000. This allowed us to move to an area we wanted to be in. If we had not taken the plunge and made the purchase, we never would have been able to afford to buy our 2nd home.”
Scoop Notes:
• Widen your search if needed to fit your budget
• Big backyards and a smaller downtown is possible
• Things change a lot – and sometimes quickly – where you buy today may look different tomorrow
Level of Interest in Interest Rates
Predictions for mortgage rates in 2023 are varied at best. What you can do today is be pre-approved, work with someone with quick closing rates, and know exactly how much you can finance whether you’re shopping for your forever home or your dream space for right now.
Lizz says “While I encourage my clients to compare rates, it is more a matter of fitting their monthly budget. Interest rates can always be adjusted in the future, but owning a home sooner than later is more advantageous to the buyer for getting into real estate ownership and benefiting from equity gains.”
It pays to consider the long game and an experienced relator can help give you perspective on that.
“Most first-time homebuyers probably started thinking about purchasing a home a year or two ago (and that’s the interest rate they saw). Now that they are ready to move forward, the rates have doubled. What first-time homebuyers need to remember and refocus on is that interest rates are around 6% with the 30-year average being 7%. So, we are actually still below the average. We need to remember this is still a good rate and focus on the long-term benefits of buying instead of being hung up on the interest rate,” observes Anne Carroll.
“The frenzy during COVID made it virtually impossible for first time buyers to be able to submit a competitive offer against those that were removing restrictions such as inspections and appraisals. Now, with higher interest rates, buying power is down, however, the competition is also down and they have more time to consider a property before jumping in. It’s a balance,” Holly.
Move-In Ready or Ready To Renovate
Deciding you’re ready to buy your first home can come with a lot of sleepless nights… does this make the most sense for me right now, do I anticipate my family dynamic changing soon, is this a good area to invest in…?
The insight of a local and experienced realtor makes all the difference especially when you’re deciding on a fixer-upper or a turnkey purchase.
From a fixed rate perspective, Lizz says “In my recent experience with first-time homebuyers, they want move-in ready homes. It is more advantageous for them to pay for an updated home over a 30-year mortgage than to renovate with unknown cost, prices and quality of work. First-time home buyers in Charlotte don’t necessarily have access to family or friends in the contracting business to help them.”
Scoop Notes:
• Where are you putting your money – down payment or renovation?
• Ready now or ready later which are you willing to live with?
• Are cosmetic fixes enough for a gain if you sell in a few years?
“My first home was purchased with my husband in Virginia in a neighborhood we loved. The home we bought was a foreclosure and the agent we used was an expert in this field. Due to the location, school district, and the money we invested into the home, it was a solid investment. We gutted the kitchen and half bath and replaced the siding and roof. We would have made additional improvements if we hadn’t moved to North Carolina. It sounds obvious but surrounds yourself with a good team of experts. Learn as much as you can about the care of a home. And explore our beautiful city of Charlotte,” Grissell.
Remote Work Impact
With work-location flexibility comes the need for home office space like never before. This translates into either – more square footage or nearby co-working spaces for first-time homebuyers.
“The ability to work remotely has helped first-time buyers rethink what they want and need in a home. Many are looking for a larger space where they can have a separate office and flex space inside and outside. This also allows buyers to look a bit further from the city since commuting is taken out of the equation and they can consider areas that may be more affordable,” says Holly.
If you’re looking to purchase new construction – know that builders are responding to the need for floorplans that include more flexible spaces whether that’s an office today, a nursery tomorrow, or just a place to retreat.
Lizz says “Builders are designing homes to fit these needs and smaller square footage is less attractive than before unless there is a communal work space or the neighborhood has co-working nearby”.
Scoop Notes:
• Are there days you will have to commute?
• Does the floorplan afford quite spaces when needed?
• Are you surrounded by the things that make you happy – activities, tree canopy, retail?
Can the First Buy Last a Lifetime?
Are first-time home buyers saying I do – or just yes for right now? While it’s nice to know what the competition is up to, this really is a case of ‘you do you’.
For many the first home is a stepping stone. You want to love where you live but also not feel like you’re ‘throwing your money away’…
“In my opinion, first-time homebuyers are considering all options. The buyers I have worked with focus on the future with a wide lens. They desire to build equity by investing in multiple homes. Some of those might be fixer-uppers, others used as rentals, or for extended family members. They have a broad view and I agree completely,” said Grissell.
For Anne Carroll her recent first-time home experience is showing all the signs of a lasting relationship. “We purchased a home that we would be able to grow into as our family expands with children. We found a house in the neighborhood we wanted to be long-term near family and friends with schools in mind. Through the home-buying process I learned that when you see a home you love, go for it, even if you think your offer isn’t good enough! You never know! A year and a half later, I still pinch myself that we own a house in the place we want to be. Small things can be updated and changed over time, so don’t worry about feeling the need to have the cash to make improvements right away. At the end of the day, the appreciation we have already gained on our home makes us feel at ease that we made the right decision instead of continuing to rent and looking for the ‘perfect’ house.
Buying your first-home should be memorable for all the right reasons. If you’re ready to start the process reach out to the experts at Helen Adams Realty.
Helen Adams, a sixth-generation Charlottean, founded her residential real estate company in Charlotte in 1975. Her achievements as an entrepreneur and community leader laid the foundation for a thriving, multi-office real estate business, and today she has become a role model for women throughout the Charlotte region. Second- and third-generation family members, led by Jeff Adams, continue to successfully operate four offices serving Charlotte’s finest neighborhoods with a stalwart commitment to perfecting their craft.
