CLARK: Buyers are out there

Rents increased 3.6% in August since the same time last year. This was the largest increase in seven years. Renters should expect further increases in their monthly payments as rental vacancy rates decrease and job creation increases across the country. Landlords are pleased with the rental gains they are realizing with their rental investment properties.

Large and small rental investors are enjoying the returns on their investments. Realtors are among the biggest investors — surveys indicate about a third of realtors have rental properties.

On the flip side, renters don’t like paying more money per month as tenants. Typically, rising rents causes more renters to purchase a home. However, today the percent age of first-time buyers has dropped to 30-year lows. Increasing rents are making it tough for first-time buyers to purchase a home as it is consuming more of their incomes and making it difficult for them to save for a down payment. Making it more challenging to save for down payments for a home are rents are surpassing the increase in wages.

In the past, U.S. gross domestic product grew annually at 3%. However, since the economic downturn, it has averaged 2.2% which has a substantial effect on our $18 trillion economy. Despite these conditions, home prices have ticked up in some markets because of limited inventory and pent-up demand.

According to the National Association of Realtors (NAR), only 5-million single-family and apartment homes have been built in the last five years, although 12.5 million jobs have been created during that time.

Greenwich Realtors are reporting that many buyers are looking, but are hesitant to present an offer. Some buyers are returning to homes multiple times, are having their agents check periodically with the listing agent to see if homes are still available while not providing a reason for their inaction. Listing agents speculate they haven’t sold their existing home or feel paralyzed by global economic uncertainty.

Many financial and economic analysts anticipate that the Federal Reserve is going to increase interest rates next year. Should interest rates increase, it is also projected that buyers will be more motivated to purchase a home before the rates increase making an impact on what they can afford.

The fourth quarter of the year has presented great turnkey, relatively new and new homes to come on the market in sought-after neighborhoods (i.e. Riverside). They are well priced and have brought out serious buyers trying to purchase by year end. Buyers sitting on the fence may miss out on these opportunities.

In the meantime, baby boomers downsizing will continue to fuel the real estate market along with internationals seeking a safe and secure place to live and invest. International buyers having cash are out there purchasing properties and are doing so quickly.

Mary Ann Clark is a realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected]

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