Ready to buy in as market bottoms out
NEWPORT NEWS — At a time when most people are holding back from big purchases, Marqi Blount is looking to buy a home.
"It seems like a good time to buy," said Blount, who works in computer-aided design for Northrop Grumman's Newport News shipyard. "If home prices are eventually expected to increase — getting in on the bottom of the market, I could get some equity."
The U.S. economy is grinding to a halt, in what's expected to be the longest recession since World War II and the worst downturn since the Great Depression. Nationally, consumer confidence in February dropped to the lowest since the Conference Board started tracking it in 1967, after about 598,000 people lost jobs in January and 651,000 in February. Consumers are pocketing, rather than spending, their money.
This region has been spared the worst of the downturn, but many potential homebuyers are sitting on the fence. They're afraid to commit to a big purchase if they might lose their job in coming months as the economy tries to right itself, some local real estate agents have said. That's what's keeping one of Tim Jasper's clients from buying a house right now, said Jasper, an agent with Teagle Realty in Newport News.
But for Blount, it's different.
"I feel secure in my ability to keep my job," the 29-year-old said. "I don't really have any concerns."
Low interest rates and a selection of lower-priced homes seem to be drawing first-time homebuyers like Blount to the market, said Jasper, Blount's agent. About 43 percent of the homes sold on the Peninsula so far this year went for between $100,000 and $200,000, Jasper said.
Military families, too, are buying homes, and they don't have to come up with a down payment and can finance their funding fee if they get a Veterans Affairs loan, he said. They might not even have to pay closing costs — often paid by sellers in this market, Jasper said.
Corporate employees transferring into the area are also looking to buy, said Tim Churchwell, a real estate agent with Prudential Towne Realty in Smithfield.
It seems as if the homebuying freeze is beginning to thaw, he said. "There have been a lot of buyers out there.
"Housing prices are stabilizing. They're realizing, hey, you're never going to time the bottom of a bad market. They can find nice homes that they've been waiting on for quite a while."
Blount, who grew up in Newport News, is spending $740 a month for an apartment in Portsmouth. He's looking for a house in Newport News, Hampton, Suffolk or Portsmouth for up to $200,000. A mortgage will likely cost him about $1,250 a month, he said. But unlike rent — which can go up — a mortgage payment would stay about the same, he said.
Blount considered buying before, in 2006, as the real estate market was leveling off from its furious climb. He wasn't paid as well then and didn't have a strong credit score, so he suspended his search.
Now he thinks that he might get a better deal than he would have in 2006. The median price of homes that sold in January in Newport News was $169,950, down 10.6 percent from January 2007's median of $190,000, according to statistics from the Real Estate Information Network. The median is where half of homes sell for more and half for less.
But Blount will have to front some money for a down payment. No-money-down loans were easy to come by in the mid-2000s housing rush, but that's not so anymore, Jasper said. And credit scores are being more closely scrutinized than they were a few years ago, he said. He's working with three other clients to straighten out their credit so they can buy, he said.
On a recent afternoon, Blount looked at four houses. First was a two-story 1,382-square-foot house in Newport News with an asking price of $192,500 — about $30,000 above its city-assessed value.
"It's OK," Blount said.
Jasper said, "I picked up from Marqi when he says, 'OK,' it means 'No.'"
Scratch that one from the list.
Next was a two-story down the street with 2,117 square feet and an asking price of $189,900. Better, Blount said.
Option three was 1,500-square-foot trilevel in Hampton for $189,900. It came with wood floors, a built-in stove and a screened back porch. "Yeah, I like this one," Blount said.
The last stop was another trilevel in Hampton. It covered 1,560 square feet and was listed for $192,000.
"Give me the thumbs-up or the thumbs-down," Jasper said.
"Thumbs down."
It's the 14th house that Blount has visited since he started looking in January. The third one he saw that afternoon was promising, he said. He'll think about it.
The last time that he liked a place, he thought about it too long, though. It had languished on the market for months, and then someone else put an offer on it before Blount did.
"I didn't pull the trigger fast enough," he said.
"I think things are heating up a little bit," Jasper said, "because that stuff hasn't happened in months."
Ready to buy a home?
The U.S. Department of Housing and Urban Development's Web site offers tips for potential homebuyers at www.hud.gov/buying/
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