First Time Home Buyer Choices

If you’re a first time homebuyer looking to purchase your first residence under $250,000, you are in luck due to the lowest interest rates in over 50 years. For you, buying is cheaper than renting—something I do not usually say because not all renters are well-suited to home ownership. If you’re transient, in limbo about your life and goals, want to change careers or just not sure what the immediate future holds for you, then you should stay put until you’re ready to take that first big step to home ownership.

However, if you feel secure in your job, a good credit score, relatively free of long term and short term debt, you probably should seriously think about using your PFD check to check out owning your own home. One reason is that due to the lack of apartment construction in Anchorage over the past five years, you can count on your rent increasing so consider fixing that monthly payment now while you can purchase a thirty year mortgage for under four percent—a rate unheard even one or two years ago. Mortgage rates aren’t going to go any lower but property values will increase due to lack of affordable homes to choose from and the high cost of building new ones.

So what’s out there to consider? The Anchorage MLS lists 79 single family homes under $200,000 for sale. But a closer look reveals that this category also includes trailers on single family lots and attached zeroes where you share a common party wall but, unlike condos, you own the lot your home sites on. I can say, with some assurance, there are no brand new single family homes for sale (most are 40 to 50 years old) in this category. Even the attached zeroes are usually 20-30 years old. Old is not necessarily bad but if you purchase an older property be prepared for the extra costs of maintenance and repair items whether it’s a new roof or new dishwasher.

If you say no thanks to an older property, you’re probably going to land in a condo development. So the question is how to find the best condominium for your lifestyle.
A close location to work is fast becoming a pre-requisite for many buyers who are rejecting drive-time. Even in Anchorage, where the average commute is probably a half or a third of what it is in other metropolitan areas, more and more buyers are looking at properties that are only five to ten minutes from work. You save on gas and personal time.

Another, more subtle consideration, is whether or not the condo is part of a well-planned community. Does it have common areas? An attractive entrance sign? Is it close to a park or a school? A lot of condominium developments were thrown up during the l990’s without any consideration for what we call in the business ‘place making’ where every unit looks the same, even down to the paint color.

A good condominium development has name recognition in the real estate industry as well as the general public. It has varied exterior architecture yet maintains a homogenous quality. As a first time homeowner, you want to be able to say with pride, “I live at……” If you can’t say that phrase when you’re standing in the driveway of your potential first home, keep looking.

Another important factor is whether or not all the condos in the development are the same size and style. If every condo has the same number of bedrooms, bathrooms and garage space, and there are a hundred units in the development, chances are you’ll face some tough resale competition when you decide to sell and move-up. Variety in style and size adds diversity to the development and keeps it socially vibrant.