SAN FRANCISCO, Calif. (KRON) — With spring in full bloom, the home-buying season has kicked off strongly after a year of uncertainty caused by the coronavirus pandemic.
The San Francisco Bay Area, which includes all nine counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma, posted an increase of 35% over last year’s sales for single-family homes.
Many who have been able to keep a job and work from home amid the pandemic are now drawing major interest in buying a home.
One of the biggest hurdles for first-time homebuyers is figuring out how to finance their purchase.
KRON4 spoke with Noni Ramos, chief executive officer at Housing Trust Silicon Valley, about tips for first-time buyers.
Q: What does the current housing market look like for first-time home buyers in the SF Bay Area?
“There are many buyers out there, we’ve seen again part of the effect of the pandemic has done, it has created migration patterns,” says Ramos.
“We have folks leaving certain parts of the Bay Area creating demand in other parts of the Bay Area, so it’s driving up the cost particularly as folks look to purchase homes.”
First-time homebuyers who didn’t lose a job due to the pandemic are able to take advantage of low interest rates on mortgages.
The San Francisco Bay Area recorded one of the biggest growth among the regions with 21.3%.
Renters have trouble saving
For Bay Area residents who rent, housing does not come cheap.
According to Zumper, the median rent in San Francisco for a one-bedroom apartment sits at $2,600 per month.
In San Jose, the average rent for a one-bedroom apartment is currently $2,095 per month.
“One of the major challenges for first-time homebuyers is accumulating the resources to put down a down payment and if you don’t have the down payment you can’t access a loan from a traditional, conventional lender,” says Ramos.
A recent survey from Realtor.com revealed that 44% of would-be first-time homebuyers were holding back because they did not have enough money for a down payment.
Q: What are some ways first-time homebuyers can compete in the current market?
“What I would suggest is being informed and reaching out in trying to get information as much as you can,” says Ramos.
“We have different webinars, different sessions that we offer and so you can always come to our Housing Trust Silicon Valley website and we will list all of the different homebuyer webinars that we have available,” Ramos added.
“We actually have one coming up on May 6, this being co-hosted by our San Jose councilmember Magdalena Carrasco.”
Empower Homebuyers is a down payment assistance loan for first-time homebuyers in Santa Clara County.
How it works:
If a homebuyer has at least 3% of a home’s purchase price saved up, an Empower loan can provide 17% of the price — enabling a down payment of 20% on a home with a sale price of up to $800,000.
To learn more, click here.
Other tips
- Start your search online.
- Attend a first-time homebuyers seminar.
- Contact a bank you are familiar with and ask about their community development loan program. (Some banks have a small group of loan officers that have the ability to offer incentives to homebuyers).
- Find a local Department of Housing and Urban Development-sponsored not for-profit agency. (A HUD-certified homeownership counselor should be familiar with your local programs and guidelines).
- Ask family and friends for a referral to lenders/real estate agents to consult.
The San Francisco Bay Area has seen home prices continue to climb due to strong demand and low supply.
Ramos tells KRON4 News that even before the pandemic, there were not enough homes to go around.
Q: What’s the future outlook for the market? Where do we see things go from here, and will it get easier for first-time buyers?
“The inventory is tough to know what’s going to happen with the inventory if we continue to see the type of demand that we have seen for inventory of housing,” says Ramos.
“It can continue to be challenging for potential home owners to identify properties, so production of new housing is also key.”
If you are looking to become a first-time homebuyer, visit Housing Trust Silicon Valley to get started.
