May 23 - The spring buying season is turning out to be lukewarm as tight inventories and rising prices prevent potential home buyers like New Yorker Brigitte Paulick from finding their dream home. Conway G. Gittens reports.
Brigette Paulick is young, financially stable, and wants to become a homeowner again - but finding a home in her desired neighborhood, at the right price has been difficult. She and her agent, Steve Snider have been at it for about three months and she's frustrated. SOUNDBITE: BRIGETTE PAULICK, POTENTIAL HOMEBUYER (ENGLISH) SAYING: "There's not really that much inventory out there and then every opportunity that we get to see anything, Steve and I rush over immediately and we've gotten into the situation of being outbid." REPORTER ON CAMERA: CONWAY G. GITTENS, REUTERS REPORTER (ENGLISH) SAYING: "The apartment she's looking to buy in this multi-family home is in a pricey New York neighborhood, but the same scenario of too tight inventory and too high prices is playing out on city blocks and suburban lots all across the country and a different price points." And that's squeezing out a key demographic - making for an underwhelming spring buying season, says Susan Wachter, professor of real estate at the Wharton School of the University of Pennsylvania. SOUNDBITE: SUSAN WACHTER, PROFESSOR OF REAL ESTATE, WHARTON SCHOOL OF THE UNIVERSITY OF PENNSYLVANIA (ENGLISH) SAYING: "We still have a quarter of homes that are under water that are in the low-affordable range and that low-affordable range is less affordable because of the lack of inventory and it's holding back the first time home buyer and it's that first time home buyer which actually adds considerable buying power at the purchase." The slowdown in housing is a problem for the Federal Reserve and adds to the list of reasons the Fed is in no rush to start raising interest rates. But there are encouraging signs. Sales of new homes jumped more than expected in April, though still down from a year ago. And inventories jumped to a 3-1/2 year high. Meanwhile, sales of previously owned homes also rose last month, for only the second time in nine months. And the stock of available homes for re-sale is near a two-year high. On the ground, CORE agent Steve Snider says he is seeing a pick-up in inventory along with warmer temperatures, but the situation is still far from ideal, forcing him to work twice as hard to make a sale. SOUNDBITE: STEVE SNIDER, AGENT, CORE (ENGLISH) SAYING: "Now that the weather has broken, I think April and May have been better inventory, more inventory but it necessarily hasn't translated into better prices necessarily for buyers but it certainly has given people an option to look at a couple of more things before they have to make a decision on what they want to buy." And that's encouraging to Paulick, who says she remains hopeful enough to keep on searching. SOUNDBITE: BRIGETTE PAULICK, POTENTIAL HOMEBUYER (ENGLISH) SAYING: "Some people out there argue that towards the end of the year, come election time there may be some type of shift. Is that shift going to be up or going to be down, nobody really knows, so I don't think it's not making me want to stop and not continue to look." Even if it means moving a little out of her comfort zone to see more of the limited supply in her price range.