Owner offers insights on the affordability and supply problems new homebuyers face
It’s a cutthroat market out there for first-time homebuyers. Having to compete with all-cash offers and investors over a limited housing supply, even locals looking to buy can’t afford a starter home in their area.
In an MPA Talk episode, Patrick Stoy, owner-broker of MC Mortgage Group, addresses these issues and offers solutions to help tackle them. According to Stoy, the biggest challenge new homebuyers face today is buying a primary residence in their local area at an affordable price.
“How do we get homeownership for primary residence people and somehow get the sellers to accept their offer over somebody else’s that’s all cash and binders and investment for a second home? It’s definitely a challenge,” Stoy said. “Here in the company, I’ve got a lot of people in their 20s and they’ve been willing to buy houses. I’ve helped them get pre-approved and put in offers, but the whole thing is trying to get the offers accepted because the other offers come in with $50,000 up and above the list price, and it’s hard for us to say ‘no’ on that.”
“In our area, you can find things probably worth $300,000 for a starter, and that’s a lot of money for somebody willing to start off for their first home. Then, on top of that, if they’re going to have to put 5% down on a $300,000 house, it’s $15,000. And a lot of people just don’t have that in their savings account,” he added.
The solution, Stoy suggested, may lie in manufactured homes.
“There’s a lot of investors doing manufactured homes that you never thought would ever do manufactured homes,” Stoy said. “There’s a stigma in buying a manufactured home… but at the end of the day, it’s still housing, it’s a roof over their heads, and they don’t have to move around every couple of years.
“It would be great if there was some tract of land outside of the urban area and there are some incentives that get the developer put in there and then everybody has a modular manufactured home that can come in on a fixed price and it can be affordable. It’s super important because it’s what can help people build wealth over the long run instead of it going somewhere else.”
Listen to the podcast here: Journey’s end – how a broker can make all the difference
