Falling Prices Draw First-Time Home Buyers

Falling Prices Draw First-Time Home Buyers

NY Times, April 3, 2009

Figures released last week by the National Association of Realtors show that sales of existing homes across the country rose 5.1 percent in February, with much of the increase concentrated in foreclosed homes bought for less than $300,000. Even with tighter borrowing restrictions, many families used to renting are discovering that they can afford to own.

“They are the most active participants right now because they don’t have the burden of having to sell their old homes,” said James Diffley, a managing director at IHS Global Insight, a research firm. “You have a bunch of young people who were forced to sit on the sidelines because houses were so darn expensive, and now they’re starting to come in.”

Real estate agents in Arizona, Florida, Nevada and other states hit hard by the bust say they began to notice rising interest among first-time buyers a few months ago, as prices dropped by more than a third.

Ms. Goldman - Asked if she felt vindicated — rewarded for saving when so many others spent — she said no. “It’s sad that for me to buy a house, the economy had to be like it is,” she said.

Sitting on her couch, overlooking the pool, Ms. Goldman said she feared that the drop in prices would draw back the same investors who created the housing bubble in the first place. Real estate agents said this was already happening, even as the wave of foreclosures and evicted families would most likely continue.

“It’s not worth it in the end,” Ms. Goldman said, adding, “It’s unfortunate that I have to build my happiness on top of tears.”