People who couldn’t afford to buy a home a year-or-two-ago, are finally able to get one now…thanks to a weak housing market that continues to drive prices way down.
But the path to the American Dream for a first-time buyer can be a little rocky.
Debbie Payne is in her new backyard….shoveling a pile of fist-sized gray and white rocks.
"These little rocks weigh a whole lot more than I thought."
Dressed in khaki shorts and a floral top with her blonde hair pulled back in a pony-tail…Payne is scooping the rocks into a planter near her swimming pool. Do-it-yourself projects like this are one of the pleasures of home ownership. Something Payne says she wouldn’t have been able to do back when she was renting.
"This to me is just like paradise. We pretty much live in the backyard."
Payne and her partner…both approaching 50…are nurses. They bought this two story house in Sacramento’s modest Rosemont neighborhood last month for $275,000. She says a few years ago it probably would have sold for $100,000 more. The 30-year-old home has four bedrooms and two-and-a-half bathrooms.
Sitting at her dining room table, Payne remembers when she and her partner got the call from their realtor…that the house was theirs.
"Oh my gosh, I mean we were screaming up and down, just couldn’t even believe it."
That call came after three long years of house hunting.
"Because we had looked for so long we had put in bids on different houses and had been outbid by other people a handful of times. We didn’t really think it was actually going to happen but it did. We were just so thrilled."
And although the thrill isn’t gone it may be less intense now that Payne and her partner have lived here for six weeks and discovered the flaws of a formerly-foreclosed home, left vacant for six months.
"It was pretty much a mess. We’ve had some major repairs to do - some plumbing problems and we’ve got holes that are in the floor that we have now discovered. So we’ve got some work ahead of us."
And that’s pretty typical for people buying a foreclosed home. Knowing how to swing a hammer will definitely come in handy. And realizing you’re probably not going to find a home in a ritzy neighborhood will help your search too…according to Kathy Fox – a real estate agent for Prudential NorCal Realty in Carmichael.
"In many cases the bank-owned homes need some fixing and more fixing than a neophyte is prepared or understands that they can do. And some of the best buys are in areas that maybe are not the favored areas in terms of the neighborhoods that people want to live in."
Such as Land Park, East Sacramento and Midtown…because Fox says those areas have more or less maintained their values.
"They’ve come down some but not like some of the other areas. Not a Del Paso Heights or an Oak Park where values of really crashed."
Right now, Fox has eight clients looking to buy homes. Half of them are first-time buyers. She says the draw of bank-owned homes is extremely high.
"We’re seeing a lot of people who come in because they’re hearing a lot about foreclosures and think that they can make a great deal. Some of those people are investors but a lot of them are first time buyers who didn’t think they could buy a few years ago."
And about those investors – first-time home buyer Debbie Payne says many times, those were the people who kept outbidding her when she first tried to buy a house.
"It was like the investors seemed to have access to what was coming fresh on the market quicker than the general public did."
But investors aside, most experts agree this is a great time for first-time buyers to get their feet in the door.
In 2006, about 36% of the people buying homes across the country were first time home buyers, according to the National Association of Realtors. Last year, that number went up to 39%.
Andrew LePage is an analyst with DataQuick Information Systems. They track home sales data. He says as long as a first-time buyer has a secure job and can realistically afford a house…using traditional financing…now is the time to start looking.
"What I don’t think potential first-time buyers should do is just sit back and say ‘well, I know the market’s going to decline for another year or two.’ It might especially if we head into a deep recession for example. That’s why it’s important to be sure that you’re secure in your job and you’re going to be there at least five years if you’re a first-time buyer."
As Debbie Payne gleefully shows offer her new home…she stops to reflect on why home-ownership is so important to her.
"When we rented, our home felt like home too but it wasn’t ours. We couldn’t paint the walls and change things around that we wanted to do. And it is just part of the American Dream."
And she says despite some major home repairs and the sometimes frustrating process of buying a home…finally realizing that dream makes it all worthwhile.