Mar 20 - As the spring selling season officially kicks off, inventories remain tight, and buyers face higher rates and prices and even bidding wars. Bobbi Rebell reports.
Simon and Leanna Laming are excited to move into their new home. They just relocated for Simon's new job, and feel lucky to even get into a house they can afford. Coming from Vegas- where they sold their house for $160,000- more than doubling their investment- to the town of Ossining, New York- they found there wasn't much to choose from- paying $380,000 to lock in this fixer upper. SOUNDBITE: SIMON LAMING, HOME BUYER (ENGLISH) SAYING: "It was competitive. I mean we were in a bid negotiation- what do you call it like- a bidding war. So, we sort of had to go straight into that and deal with that and I mean, that changes your whole perception. It blows some dreams. That makes you really evaluate what something is worth." REPORTER BRIDGE: BOBBI REBELL, REUTERS REPORTER (ENGLISH) SAYING: "Prices in this suburb of New York City are still far from what they were at the peak of the market, but despite the harsh winter weather buyers have been coming out and when priced right, properties are going fast." As spring begins- and the snow finally melts- higher prices and low inventory are increasingly a reality for buyers- many caught off guard after years of rock bottom deals. SOUNDBITE: SIMON LAMING, HOME BUYER (ENGLISH) SAYING: "There were a few houses that we saw that you know disappeared that got snapped up off the market. And then this was luckily still here when we came here but…" SOUNDBITE: LEANNA LAMING, HOME BUYER (ENGLISH) SAYING: "There weren't many." SOUNDBITE: SIMON LAMING, HOME BUYER (ENGLISH) SAYING: "Yeah not too many." Home values are up 12 percent from a year ago according to CoreLogic. That's crimping sales. Existing home sales fell in February- to the lowest pace of sales in 19 months setting up for a precarious spring selling season. It's about affordability says Trulia Chief Economist Jed Kolko: SOUNDBITE: JED KOLKO, CHIEF ECONOMIST, TRULIA (ENGLISH) SAYING: "Prices are up about 10 percent year over year and mortgage rates are up about a full point which adds another 10 percent to the cost of a mortgage on a given home. That means that buying is roughly 20 percent more expensive for a given house right now than it was a year ago. That is particularly hard for first time home buyers. It also is a challenge for investors for whom the math of buying to rent places out doesn't look as good as it did a year ago." The Lamings were experienced buyers- and were able to get financing. First time buyers- who make up more than a quarter of the market- face more hurdles than ever: Realtor Mark Seiden: SOUNDBITE: MARK SEIDEN, OWNER, MARK SEIDEN REAL ESTATE TEAM (ENGLISH) SAYING: "Financing is still tight. The banks are very tight and they probably should be. I mean really what happened over the last few years? How many short sales there have been-and there have been quite a few around here." Building permits are on the rise- recently showing their best monthly gain since April. And homebuilder sentiment is improving as they get into spring- their best season. Two of the biggest home builders in the U.S.- Lennar and KB Home both recently reported strong profits, and along with other builders, see a good spring, thanks to a better economy and more confident buyers.