Many people are afraid and apprehensive about trying to buy a house in a hot market

For Brian Fleming, buying a first home didn’t start to be a big deal of concern, as he and his wife had been trying to save for it after their wedding in 2019. When they began the process of buying a home. Buying a home for good, they thought they knew exactly what they wanted – then market realities set in.

And it’s not just young first-time buyers who find home buying a “daunting” task this year.

James Mackie, 33, and his wife now live in their third home since their marriage after college.

“In the past, with my house purchases, it was either a buyer’s market or a more neutral market where you can ask for things and you don’t have to take those big risks that you are now,” he said. Mackie said.

A recent national survey by The Harris Poll, which asks about the home buying experience of more than 2,000 adults, shows great concern that the Front Wasatch, like much of the country, sees a rapid increase in house prices.

Almost half of respondents – 49% – say they are intimidated by the process of buying or selling a home, while 44% say they don’t know how to start the process. The anxiety was mainly due to a lack of knowledge, which is particularly prevalent among adults aged 18 to 44, where 60% said they felt intimidated and 56% did not know where to start.

Among the main findings of the survey, commissioned by Utah real estate company Homie, 61% believe the COVID-19 pandemic has increased the financial stress of buying a home. The stress was even greater among those aged 35 to 44 – where 7 in 10 reported this concern. Additionally, 46% of Americans said they needed to reconsider the type of property they were looking for.

Newbies thought they had a plan

Initially, the Flemings, both under 30, wanted to find a property in the order of $ 300,000 or less.

“For much of 2020 we kind of kept an eye on the market by looking at places like Zillow every now and then. But we decided in early 2021 to start actively looking more seriously, ”Fleming said. “The list of what we wanted in a house was constantly changing as we looked around. The prices were higher than we thought, so we are aware of that, we have taken the approach that we don’t have to live in a place where we will live for 20 or 30 years. We were basically saying, ‘Let’s find at least one place that we’d be happy to start with.’ ”

Gavin Mackie, right, plays as his dad, James, center, changes his brother Luke’s pants as mum Nachelle and sister Lily prepare for dinner at their home in Provo on Wednesday, April 28, 2021.
Scott G Winterton, Deseret News

They ultimately settled on a townhouse in Salt Lake County which was way more than their original price. The couple spent a lot of time going through the numbers on a spreadsheet to make sure it was something they could reasonably afford without being “poor in house.”

“We both looked very closely at our finances and… it was a little scary realizing what kind of price we had to accept because of the market,” Fleming said. “But we decided that we would be okay with withdrawing more savings accounts, and then we could replenish those savings very quickly after we bought a home and moved in.”

Their monthly mortgage payment is about the same as their rent for the apartment they were renting.

“It was scary to open up to such a high price range. At least for me, it was hard for me to think about close to $ 400,000, ”he said. “After taking the time to weigh the options we had, we felt we had made the right decision to buy something, even though it was much higher than what we were initially looking for.

Data shows costs are rising

Research by Online Mortgage Advisor shows Salt Lake City has experienced the third worst change in affordability in the world. It creates anxiety when such statistics come to light.

In 2016, full-time workers in Salt Lake City could generally afford 16.4 square meters, or about 177 square feet, based on the local average annual salary. Last year that number dropped dramatically to 4.8 square meters of affordable property – a difference of 11.6 square meters.

Tucson, Arizona and Pretoria, South Africa recorded the biggest drops.

The overall measures are based on a single person earning the average monthly net salary in each city and the properties considered in the methodology are one-bedroom condominiums in the city center, explained Romi Divito, senior outreach specialist. .

“Our results indicate that wages in the United States are not increasing at the same rate (as) housing prices, which evaluates the prices of premises,” said Divito.

Using Trulia’s announcements in February, the data was also analyzed to determine what the average person in Utah could afford, she said, revealing that a single person could buy a property in ‘worth up to $ 247,100, while a couple could afford $ 494,200.

The least affordable city in Beehive State, according to the report, is Cottonwood Heights.

“A single Utahn can only afford 2.4% of the properties in the Cottonwood Heights market,” she said. “Cottonwood Heights is also the least affordable city in Utah for couples looking to buy property in today’s climate (at just 20%).”

In contrast, Cedar City is currently the most affordable city in Utah for singles and couples, she added. Data shows that individuals can afford 55.7% of available homes, while couples can afford almost 80% of properties.

Of the 50 US states, New York is the most expensive state for singles and couples to buy property right now. Individuals can afford 5% of available properties and 20% for couples. Wyoming is the most affordable state, with 79.7% of properties affordable for singles and almost 95% for couples.

Statewide, 52.7% of properties are affordable for the average Utahn, with 75.6% of properties affordable for couples.

Even experienced buyers find it difficult now

The survey found that among Americans who have never bought or sold a home, 70% had experienced difficulty during their last transaction. Yet while those with previous experience in the housing market have reported being able to navigate the process with a little less confusion, some still face some angst.

James Mackie, 33, and his wife now live in their third home since their marriage after college. The Mackies’ first place was in their native Southern California, where they lived for two years before a job change brought them to Provo. After four years in their first home in Utah, they recently moved to another home in the same town. Even after three buying experiences, the process remains difficult, especially in a hot real estate market, he said.

Ryan, Lily and Luke Mackie play with blocks at their home in Provo on Wednesday, April 28, 2021.

Ryan, Lily and Luke Mackie play with blocks at their home in Provo on Wednesday, April 28, 2021.
Scott G Winterton, Deseret News

“It’s always a little intimidating, especially because what I’ve been sort of told by several realtors and other friends who are also going through the home buying process right now,” said Mackie. “You have to put some serious non-refundable money in your contract, and that’s something that still scares me because it’s something I don’t know about.”

He said that in this new environment there are certain things buyers need to do to protect themselves.

“First, I have to make sure I know what I’m doing. I have to make sure that I know my finances are in good shape, to make sure that I am not spending too much within reason, ”said Mackie. “And that I’m going to be able to follow through – that this is actually the house my wife and I want, that we’re not just making an offer willy-nilly.”

Some tips for those looking to buy

To alleviate some of the tension, experts advise getting all the information you can to help remove some of the mystery and angst in the home buying process.

“The first thing (young potential buyers) should do is talk to people they know who have bought a home, who currently have a mortgage with a lender who satisfies them, or with a managing agent who satisfies them. “said Grant Whitaker, President and CEO of Utah Housing Corporation. “Also, go see a mortgage lender and get prequalified so they know how much they can afford to buy. And if that lender has educational resources, they should act on them. “

He said it was essential to educate yourself and get a feel for the right types of properties with a lender in the early stages of the process. Finding affordable housing would then be the next step.

“(Young buyers should try to) make sure they don’t get into something they wish they hadn’t gotten into like a bad house, bad mortgage arrangement, or bad neighborhood – something like that, ”he said. “They really need to be well informed before they go out and try to buy a house.”

Observers point to a confluence of factors that have created an ultra-competitive market with historically low interest rates, combined with the impact of the global pandemic which has resulted in a particularly difficult home buying situation.

“There is so much demand for housing. You’ve got a millennial population that’s already bought a home, they’re sitting on equity and they want to take that equity and transact it into a bigger home, ”said Joe Grover, Marketing Director at Homie. “With interest rates so low for so long and you combine some migration issues and you have an environment where the process, even independent of COVID, is intimidating and overwhelming. But then you add this very tough buyer’s market on top of that and some financial pressure that came with COVID, and that exacerbated that situation.

The Mackie family - Lily, left, Gavin, James, Luke, Nachelle and Ryan - pose for a photo at their home in Provo on Wednesday, April 28, 2021.

The Mackie family – Lily, left, Gavin, James, Luke, Nachelle and Ryan – pose for a photo at their home in Provo on Wednesday, April 28, 2021.
Scott G Winterton, Deseret News

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