Some 455,000 first-time buyers took advantage of low prices and interest rates to close transactions in the first quarter of the year, latest NAR statistical data show. Anecdotal evidence suggests the first-time buyer tax credit played a role in bringing out buyers, too. Other data show that the large number of distressed sales continues to hold down prices, with 134 of 142 markets tracked by NAR showing price declines for the quarter. Total state sales activity for the quarter put sales on a 4.59-million unit sales pace. (Article from Ohio Assoc. of Realtors)
This is Great News! First time buyers buy homes from the “first tier” buy-up buyers-people who want to purchase larger more expensive homes to fit their family needs. This in turn enables the next tier of buyers to sell their current properties and move up. This is the traditional way the real estate market moved. The number of foreclosures and distressed sales has given the first time buyer an opportunity but has not benefited the buy up buyers. We are beginning to see that trend level off and the “old market activity” start to move again. This is the action we need to see sustained in order for the real estate market to stabilize and move back to its traditional workings.