First time buyers seem to have high expectations?

I had occasion to read an article recently in one of the real estate trade magazines about the expectations of first time buyers. The content of the article was derived from a survey conducted by one of the large international franchise companies.

According to the survey of sales reps and brokers, over 80% of first time buyers consider move-in conditions to be most important when searching for their home, although affordability is the number 1 concern. That strikes me as somewhat of a contradiction, as it did the president of the company that conducted the survey. Only 7% of these buyers expressed any interest in finding a "fixer-upper" property; but investing some sweat - and dollars - in improving the property is an obvious way to build up some equity over a period of time.

We don't know the definition of "fixer-upper" in this context, but logic dictates that it could include improvements ranging from new paint to flooring, and updating electrical and plumbing features in the house.Conceivably it can go beyond that, to entail kitchen and bath renos, and exterior changes or repairs such as roof replacement. Many average' properties can use some landscaping improvements as well.

Another revelation is that 70% of respondents search for larger homes than they were ten years ago. It amazes me when reading articles about the home buying criteria for some of these buyers that they want such large square footage - 2000 square feet for example. I hate to admit it, but I remember the day when a 960 sq. ft. bi-level - on the main floor - was the average starter home. Developed in the basement efficiently, it served its purpose well, with or without young children occupying it.

Today, when planning your home search, it might be wise to consider future market trends, over the next four to eight years especially. The baby boomers are downsizing! Some of them are moving out of 1100 sq. ft bungalows, not only 2200 sq. ft. 2 stories. Who, then, will be buying the large 2 story homes that are so typical, and obviously popular, here in Calgary? Food for thought, because the next startling finding is that 33% of the respondents are buying their first home as an 'investment'.

Think about how we got to these market conditions today, May of 2009. The answer is greed, as buyers of all sorts became swept up in the notion that a principal residence is an 'investment'. An investment property generates revenue, be it a detached house with suite or an apartment building. Your principal residence is a roof over your head. You rent or you buy, and if you're smart about it, the house is paid off in 15 to 20 years. (There is no better way to build a tangible asset, tax free.)

The real benefit to owning is that it's yours to do with as you please, and yes,that it can be mortgaged, with sufficient equity. But far too many owners are tempted with equity take-outs. The foreclosure market is proof of that. Too many folks equate the housing market to the stock market. Both are cyclical, but you can't live in your stock certificates. When the stock broker says price dictates selling rather than buying, one is inclined to heed the advice. That's the basic difference - there's more common sense exercised in the stock market... a little more, not substantially more! It's another subject for another day.