With soaring interest rates, low inventory and bidding wars, looking for a new home is not for the faint of heart.
So what motivates prospective buyers to stay in the game when faced with so many nerve-wracking challenges?
Two first-time homebuyers shared their experiences:
Emily Main, 23
Main said she looked at 65 properties and made offers on six of them. Most of her offers were for well above the asking price but still ended up around $30,000 less than what the homes sold for.
"And don't even think about asking for an inspection nowadays," she added.
Main wasn't scared off by mortgage interest rates of over 7%. In fact, she thinks they probably ultimately helped her get her Ogden townhouse by pushing other prospective buyers out of the market.
She said her initial offer for the property was actually less than what her sole competitor was willing to pay, but the seller appeared to want Main to have the house, and asked if she could match that other offer.
Main thinks a little attention to detail is what allowed her to stand out.
"The address on my (new) house is 133 and in my offer, I put in my thousands and then I ended at $133", she explained. "Threw in a little, like, wink to the seller, like 'Oh, I like this house!' "
Main's new home was listed for $129,900. She said she paid $140,000.
Danielle Bemis, 37
Bemis, another first-time buyer, started her search early this year after the rent on her apartment in East Rochester more than doubled.
She figured it didn't make sense to pour money into a place that, in her words, "had no amenities and was getting no updates."
"On top of all of that, as a former resident of Los Angeles — I lived there for well over a decade — I never even experienced rent as high as they were asking for this East Rochester apartment," Bemis said.
She said she looked at dozens of homes, eventually extending her search to Wayne and Ontario counties. Based on what she had experienced in the market, her strategy was to focus on homes with listed sale prices between $50,000 and $70,000 over her maximum budget.
"I was uncomfortable with what I was seeing," Bemis said. "Many of these homes had visible issues: water damage, major roof issues. There was one home that reeked of cigarette smoke. Other homes needed, like, total, complete upgrades."
Like Main, Bemis knew if she finally found a place she liked, she would have to waive her right to a property inspection of her offer wouldn't stand a chance.
She fell in love with a 100-year-old home in Charlotte, and offered to pay as much as $55,000 over the asking price.
Next, she offered the maximum her lender agreed to let her borrow for a Fairport condo. She lost that bid, even though it was the highest, to an all-cash offer.
Bemis said the seller was worried about appraisal gaps. That's the difference between the fair market value of a property determined by an appraiser and the amount a prospective buyer is willing to pay. Many lenders won't grant a mortgage large enough to bridge that gap.
“It actually really upset me,” Bemis said. "At that point, I had decided that I was done.”
But that's when her agent texted her about a property she hadn't seen yet: A clean, three-bedroom ranch in Greece that had not received any offers.
Bemis and her agent surmised that the asking price was too high, meaning instead of being listed at up to $100,000 under what the seller might be able to get in a bidding war, the home was listed for what it was worth.
"When I saw it, we slammed the offer in,” said Bemis, who paid the full listing price of $175,000.
The Rochester region's median sale price in the second quarter of 2023 was $200,000.
Looking ahead
Opportunities for local buyers will continue to be limited until more homeowners decide to put their homes on the market, according to Mike O'Connor, president of the Greater Rochester Association of Realtors.
The lack of inventory, which has been a problem in communities across the U.S., is often blamed on several factors, including climbing interest rates.
“It seems that many homeowners who may otherwise consider a move are staying put because they have a very favorable mortgage rate of under 4%.” O’Connor said. “As recently as February of 2022, you could get a mortgage as low as 3.5%. Today it is nearly double, around 7%.”
Jim Yockel, the association's executive director, said it is working with other industry and community leaders to address the chronic housing shortage.
