The San Jose Mercury recently featured this article. The article talks about how first time home buyers (like yours truly) are being routinely outbid by investors. Here's a snippet:
Bill Powers, a broker with Coldwell Banker, said he represented a buyer who made an offer on a home on Willowbrook Drive in the Cambrian area of San Jose that received 73 other offers.
Another agent said a four-bedroom bank-owned home in South San Jose listed at $299,000 got 112 bids last month. The 1,220-square-foot house will probably go to a buyer who made an all-cash offer of about $360,000.
"There just seems to be a groundswell of people who have a good amount of money," said Brett Mattos of Ventura Barnett Properties, who listed the property. "The last four foreclosures I've had sold for cash."
The article goes on to say how more moderately to higher priced homes are still receiving few offers. Which of course makes me wonder why investors are scooping up the real deals that are homes that once went for a million and are now $500,000 or $400,000. These are the homes that are sitting empty for months while the small homes geared to first time home buyers like me are almost instantly snapped up.
When I read this article part of me felt vindicated. I would tell friends and family that I was looking for homes and routinely getting out bid and they would seem aghast that in this market I wasn't getting something. This article shows that I'm not making some silly novice mistake or perhaps setting my sites on homes that are out of my league.
The more I think about the fact that it probably isn't me, the more I worry.
If I or my agent were continuing to make a silly mistake on offers the situation would sooner or later correct itself most likely through us learning what we were doing. If we aren't the problem, though, if it is in fact the banks, investors, and the market in general then I have a problem that I'm not likely to be able to fix. I can't tell the investors to knock it off, I can't convince the bank that they are screwing the little guy (and subsequently communities and the country as a whole), and I certainly have little control over the market.
I've been reading (mostly on message boards - which is the place I always tend to start looking when I'm desperate) that this might be a sign that now is not the right time to buy - but that makes me wonder, if not now, then when? California real estate prices may still be inflated, but they are the most realistic they have been in over ten years. A year ago I often wondered how I would ever be able to afford a home in California and many times thought I would be 40 plus or have to move out of state by the time I got my piece of the pie. I'm not looking to make an investment, well, at least that's not my main motivation. I'm looking to find a home and just because it isn't the absolute best time to buy doesn't mean I'm still not interested. I rather come out with something that I could have gotten for 20% less in 6 months than to walk away from this opportunity empty handed.
When I read The Merc article I see that there are probably a lot of first time home buyers out there who have been empty handed for a long time. Many of them are probably more deserving of a home than I am. I'm routing for all of them. I think each time a non-investor walks away with a home in this area it is a triumph for all of us first time buyers.
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