Smart Spots for First-Time Homebuying
If you’re ready to mow the lawn and shovel the driveway, then there are plenty of smart spots for first-time buyers. Here are a few such places.
Is there affordable housing in the Granite State for first-time homebuyers? The answer is “yes,” but the best buys are driven by location. In premium areas, such as Rockingham and Hillsborough counties, first-time buyers need to do their homework in advance so that they can move fast to take advantage of rare deals.
According to the New Hampshire Association of Realtors, the median sales price for a single-family home is $289,000 statewide. However, popular areas such as Rockingham County see an average of $389,000 (an increase of over 13% from last year); equally desirable Hillsborough County comes in at $300,000. Strafford County, home to Dover, New Hampshire’s fastest-growing city, offers prices at an average of $270,000, with the Concord area just below at $267,000. Belknap and Carroll counties, home to the Lakes Region, come in at $250,000 and $276,000. The lowest pricing is in Coös County, the far north, at $135,000, or Sullivan County, tucked on the western side of the state, where homes start at $157,000.
Opportunities do exist in the higher-priced counties, but buyers need to adjust expectations and plan ahead. “The single-most important thing you can do is get preapproved,” says Kelly Arsenault of Keller-Williams/Londonderry. “This saves time, and determines how much you can actually spend. You want to be able to act if you find the home you want. First-time buyers should talk with a financial planner about a realistic budget that they can live with. You don’t want to spend all of your money on a home and then have no cash, no quality of life. Determine what you are willing to do without to get a house and what you are not. Understand your expenses. This gives you a realistic picture of your ongoing finances before you enter the market.”
Arsenault also advises new buyers to think realistically — and outside the box. “Many of the homes affordable to first-time buyers in the popular locations may need work, whether those are repairs or upgrades. These homes may not be exactly what buyers want, but if they like the location, and can picture themselves there — it can work out well,” says Arsenault. “Buyers can get a 203(k) Renovation Loan that will fund improvements. Those can be done before people move in and the payments can become part of their mortgage. Also consider the resale value; if the location is good and the home has potential, live there for five or 10 years, then move up to your dream home. Or consider buying a duplex, living in half, and renting the other half and saving that money for your next home. There are options to get you where you want to be if you are flexible.”
Carrie Barron of Bean Group in Portmouth says that homes can be found in Rockingham County for $280,000, but buyers need to expect 1950s-era ranches and Capes, or other smaller stock. “Many of these homes are in great neighborhoods and they go quickly,” she says. “A buyer needs to be able to see the house that day, and even so, there will be multiple buyers competing. This is why it’s important to be preapproved and know your financials. There are two groups competing for these homes — first-time buyers and experienced homeowners who are downsizing, so it’s tight. I advise people to prioritize where they want to be, and to shed preconceived ideas of what the house has to be like. Forget what you see on HGTV — homes can be improved, but you can’t change the location, so start there. I also recommend that new buyers educate themselves — the New Hampshire Housing Association website is an incredible resource when it comes to home-buying.”
Diane Silva of RE/MAX On the Move notes that the 1950s-era homes tend to be well-built, having more actual lumber, so resale value can be good. “Some towns also have more turn-of-the-century homes, which can be good buys but may have no insulation and dirt basements. If you don’t want a fixer-upper, don’t settle, but if you are willing to do the work, you can get a place with good potential.” She also urges buyers to look at the “in-between towns,” which people tend to forget. “Getting away from the I-95, I-93 and Spaulding corridors saves money,” she explains. “Think Barrington, Epping, Epsom, Kingston, Fremont, Sanbornton and Loudon. Sometimes home prices even vary greatly within a community. North Manchester is more expensive than over by Chester, for example.”
Silva also recommends using a buyer’s agent, a real estate agent who will work directly for you with your best interests in mind. “A buyer’s agent will call on past clients, send mailers out to neighborhoods you like, and do everything possible to get that home for you,” she says.
Lifestyle also needs to factor in. How far will you commute? Will it matter if you have a long drive and miss your kids’ after-school activities or have to drive in bad weather? Can you make a job change or telecommute? What are the schools like and other resources? If you are in a remote area, is there daycare? All three real estate agents agree that buyers need to consider the full picture before choosing their location.
“Frankly, new buyers need to expect initial disappointment because it’s a sellers’ market,” cautions Arsenault. “But, they also need to keep the faith. The right house will be found if they are patient. The more patient they are, the more likely that they’ll find their house. This is a waiting game.”