Wednesday, October 25, 2023
Salt Lake City has few to no options for first-time home buyers on a budget
Urban Living
Posted By Babs De Lay on October 25, 2023, 4:00 AM
With home mortgage rates now hovering at or close to 8%, more and more buyers are finding it harder and harder to either qualify for a mortgage payment or to find a livable property in their price range. I recently began working with a couple who were first-time buyers and who could qualify for a home roughly around $500,000.
They didn't have too big of a wish list: good-size yard for their two big dogs, three bedrooms, two baths and a mother-in-law apartment downstairs with a separate entrance. And, most important, they wanted to live close to the University of Utah.
A home, not a condo, was the request, as buying a condo in that price range would most likely require an additional HOA fee of $300 or so per month for that association's water/sewer, exterior maintenance, insurance and any amenities such as a pool, tennis courts, gym, etc.
Guess what we found for them to consider? Nada. Big fat nada.
An immediate issue was that one of the two buyers was quite tall. Older homes often do not have very large bedrooms, and so a bed that might fit the two of them would take up most of a main bedroom and leave little or no space for side tables or chest(s) of drawers. Plus, often, living space in the basement would generally be very cramped for a tall person, as ceiling height is often low.
After educating the couple about this important factoid, I then took them to homes built in the 1950s and later, to show them the difference. We found that anything close to the U—let's say, within 20 blocks or so—was in pretty crappy condition. My clients admitted they have no skills in rehabilitating a property. After learning that, I took them to Rose Park, where we saw a number of "flips" in their price range, or homes that have been recently remodeled.
We saw some cute ones, but there were no homes with separate entrances to have a downstairs apartment. They want this so they can have an income stream and renters to help with the mortgage payment.
The reality is that homes with a secondary apartment are about as hot as the hinges on the gates of hell, because so many people now need rental income to help make the primary mortgage payment and families are also looking to live together by having seniors or students of the family share spaces with parents or siblings.
Housing is expensive! Back when rates were 2.5% for a 30-year mortgage, a payment with 5% down on a $500,000 home would have been $2,466. At 8%, that same house would be $4,075 per month.
We don't expect mortgage interest rates to be coming down anytime soon, or housing prices to head downward. We'll keep looking for that needle in a haystack but, sadly, we'll most likely be battling other first-time buyers in multiple offer battles.
About The Author
Babs De Lay
A full-time broker/owner of Urban Utah Homes and Estates, Babs De Lay serves on the Salt Lake City Historic Landmark Commission. A writer and golfer, you'll find them working as a staff guardian at the Temple at Burning Man each year.
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