This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Why You Love First-Time HomeBuyers

This doesn't mean conditions are great for today's would-be first-time buyers. Many are having trouble getting a mortgage because lenders have become very conservative. And several analyses have found that first-time buyers are having trouble competing for homes with investors.

Of course, from a seller's perspective, it doesn't matter whether the buyer is a first-timer or an investor. Investors are scarfing up inexpensive homes because they appeal to renters, who are the future's first-time buyers. Any kind of demand is good from the seller's point of view.

All this suggests that a modestly priced home is a safer investment than an expensive one, because there will be a better chance of finding a buyer if times get tough.

Aside from modest price, what makes a home appealing to a first-time buyer?

Good condition matters. Many first-time buyers are used to having the landlord take care of things and don't have the skills or interest in a lot of do-it-yourself projects. A seller trying to appeal to these buyers might consider offering a warranty.

Easy resale potential can be important, too. Young homebuyers who are early in their careers want to know they won't be trapped in the home when the next job change comes along. That means that even a buyer without children may want good public schools, which make a home more appealing. Convenience to the job market is important too, and that often means being in easy commuting range of a city.

Young buyers may be more inclined than older ones to focus on nightlife and abundant outdoor activities. A staid suburb might appeal to the homeowner who has kids or plans to soon, but it can look pretty dull to the potential buyer who is not yet at this stage. Most homebuyers like to be surrounded by people similar to themselves -- young singles and childless couples, or families.

As the housing market gets stronger, all types of homes will sell, but the home that will appeal to the first-time buyer could well be a safer bet. Though a nationwide collapse in home prices is rare, it's not at all uncommon for local markets to run into trouble.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CLGX $33.34 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs