When Russ Joy and his wife Nancy bought their starter home in 2016 in the town of Royersford, PA, the notion was that they would start a family, and in a few years, upgrade to a bigger home.
Now, with three young children, the time has come, but the plan that the Millennial couple had put together to make this happen has been unable to come to fruition.
That’s because the Joys – both of whom were public school teachers until Russ took a job in the writing/marketing field at the completion of the 2020-21 school year – have been unable to compete with the craziness of the housing market, even if they are to make about $50,000 on the sale of the home they are in right now.
“It’s bad enough that prices have already become inflated beyond what we expected,” Joy said. “It’s demoralizing to see so many properties going for tens of thousands of dollars over the asking price with cash offers.
“As a young family, trying to expand, there is no way to be competitive with all-cash offers.”
It’s not just the cash offers. Or bids coming in way above list. Or even some buyers being willing to buy the property sight unseen.
The Joys thought they had found their home in nearby Gilbertsville, but they were unable to even get to the table because the sellers and the selling agent pushed the envelope of ethics to deny them their bid – which was the lone bid on the home at the time.
Having the upper hand, the seller and their agent not only wanted a filing of the financial disclosures of the monetary assets of the Joys, but also the family who are in agreement to buy the Joys current home.
The Joys agent checked in with the ethics board to see if this was fair, and the Board deemed it was. But it’s not like they were outbid for the home, rather they were kept from making the purchase because they are a young family of five and the family buying the Joys current home is an FHA loan applicant.
“It’s like they are using our age and the fact that our buyers are potentially being backed by a Federal loan against us,” Joy said. “It’d be fine if a month or two from now we found out we were just outbid, but if they aren’t selling to us based on who we are, or who the people are that are buying our house seems really discriminatory to me.”
The Joys are not alone with their frustrations.
According to the latest Fannie Mae Home Purchase Sentiment Index (HPSI), only 35% of consumers believe now is a good time to buy a home, down from 47% in April. And those who believe it is a bad time to be a homebuyer increased to 56% from 48%.
“Consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment,” Doug Duncan, senior vice president and chief economist at Fannie Mae told Housing Wire. “However, despite the challenging buying conditions, consumers do appear more intent to purchase on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the elevated savings rate during the pandemic, which may have allowed many to afford a down payment.”
The lack of available homes, combined with the higher prices and cash offers or over-market bids, are discouraging homebuyers in the short-term. There are other factors, such as job creation or job stability, and a rebounding economy actually saw a bump in the HSPI index by one point (80) in May.
Still, because the housing market still favors the sellers, more than two-thirds of potential sellers surveyed by Fannie Mae in June said now is a prime time to list a home, which is no different than it was in May.
Likewise, the percentage of respondents who think home prices will continue to rise over the next 12 months decreased slightly, but insignificantly from 49% to 47%. That two percent difference shifted to those who feel prices will stay the same (up from 27% to 29%). A total of 17% of respondents feel prices will come down, and that number remained unchanged from May.
No matter how you slice it, it seems like the feelings of homebuyers aren’t going to be much different than what the Joys are experiencing for the remainder of the year, if not longer.
“It’s been emotionally draining,” Joy said. “And the joy of looking for a house has been taken from us.”
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