First-time buyers hit hard

While most Greater Orlando homebuyers are taking advantage of improving conditions in the existing home market, first-time buyers are finding it more difficult to purchase the home of their dreams due to a shrinking inventory of lower priced homes.

“While this still is a very good time for first-time buyers, the problem right now is the availability of homes in lower price ranges which tend to be the ones commonly sought by first-time buyers,” said Scott Hillman, president of Fannie Hillman + Associates, one of the area’s top residential real estate brokerages.

“There is a growing shortage of existing homes priced under $200,000 in Orange and Seminole counties and those priced under $300,000 are also getting harder to find as well,” Hillman said, noting Orange and Seminole counties had only a 1.94-month inventory of homes as of Jan. 4, which is well below the 4- to 6- month supply that typically defines a market balanced between buyers and sellers.

According to Hillman, the inventory of homes priced under $200,000 has dropped more than 42.8 percent over the past year, while the inventory of homes priced between $200,000 and $300,000 has dropped by 19.8 percent in the past 12 months.

“One of the problems for a limited inventory in those price ranges is the increased number of investors in the market who are purchasing homes with cash, which makes them more competitive than the typical first-time buyer,” Hillman explained.

Another factor contributing to the area’s shrinking inventory of more affordably priced homes is underwater owners who currently owe more on their mortgage than their homes are worth which limits an owner’s ability to sell, thus keeping more inventory off the market.

Add to that the fact that there have been fewer new homes built in the past five years, and first-time buyers have a limited inventory from which to choose.

However, first-time buyers do have a number of things going for them, including interest rates for mortgages that are still at some of the lowest levels in history.

“I don’t think we’re going to see a drop in the demand from first-time buyers, I just think it’s going to take a little longer for them to find their first dream home,” Hillman said. “The key is being prepared to act fast. First-time buyers will find they are in a much more competitive position in a supply-constrained market by working with an experienced and knowledgeable real estate agent, and getting pre-approved for a loan, not just pre-qualified. This speeds up the offer process and shows sellers that yours is a viable offer.”

In business for more than 31 years, Fannie Hillman + Associates is independently owned and active in Winter Park, Maitland, College Park, Baldwin Park and downtown Orlando. Recognized as a leader in the sale of luxury lakefront residences, Fannie Hillman is a member of the Orlando Regional Realtor Association, is listed in “Who’s Who in Luxury Real Estate” and maintains a global presence through affiliations with London-based Mayfair International, Luxury Portfolio, and Chicago-based RELOHomeSearch, a website run by Leading Real Estate Companies of the World, the world’s largest network of premier independent residential real estate firms representing 600 companies with 5,000 offices and 150,000 sales associates in more than 30 countries. Fannie Hillman is located at 205 W. Fairbanks Ave. For more information call 407-644-1234 or visit the company’s web site at fanniehillman.com