Courtney Gross and Rebecca Wolff stand on the front porch of their North Park Hill house in Denver. The two were able to purchase their home in Denver because of the downturn in the real estate market.
Courtney Gross and Rebecca Wolff stand on the front porch of their North Park Hill house in Denver. The two were able to purchase their home in Denver because of the downturn in the real estate market. Jeff Brady/NPR
While changes in the housing market have been a crisis for some, it's created opportunity for others, especially first-time homebuyers.
The National Association of Realtors conducted a survey showing that 47 percent of those who bought a house last year were jumping into the market for the first time. That's up 6 percent from the year before.
Not only are prices down, but interest rates remain low. And an $8,000 federal tax credit is prompting a lot of activity at the cheaper end of the housing market.
Earlier this week, Brian Chalmers, 39, signed the closing papers on a 1950s, single-level brick ranch in Denver's North Park Hill neighborhood.
Getting to that point was not easy. Chalmers earns about $25,000 a year and saved up that much for a down payment.
"It's been a five-year struggle — living in very inexpensive apartments, cooking rice every day," says Chalmers. "I've gone without a cell phone for five years."
His new house is in pretty rough shape, but at $125,000, he can finally afford to make the jump into homeownership.
"There was a time back in 2004-2005 when people were purchasing this same kind of home for the high 100s, low 200s," says Chalmers' real estate agent, Ann Connelly.
Connelly says Chalmers got this house under a short-sale agreement. The lenders accepted about $75,000 less for the property than they'd loaned to the previous owner. There are other examples of good deals like this in the neighborhood, too.
The day he closed on his new house, Brian Chalmers ripped out the carpet to expose the oak hardwood floors underneath. Chalmers, 39, earns $25,000 a year and saved for five years to come up with a $25,000 down payment.
The day he closed on his new house, Brian Chalmers ripped out the carpet to expose the oak hardwood floors underneath. Chalmers, 39, earns $25,000 a year and saved for five years to come up with a $25,000 down payment. Jeff Brady/NPR
Just a few blocks away, Courtney Gross, 27, and Rebecca Wolff, 28, are preparing to spend a first Christmas in their new house.
They're in their late 20s and both are social workers. They paid just a little more than $182,000 for the house last spring. That's $28,000 less than it sold for in 2004. And that was before the house was completely remodeled from the basement to a new roof.
"Because the market dropped — everything kind of went under — we were able to get a house that a few years ago we wouldn't have been able to afford," says Wolff.
There was just one thing missing: The windows needed updating. That's where the $8,000 federal tax credit for first-time buyers came in handy.
"We turned around and used that tax credit to put in new windows, but then we get a tax credit on new windows," says Gross.
Their real estate agent, Vicki Porter, says that a few years back, foreclosures pushed down prices in neighborhoods like this. Now, she says, lenders are more interested in working out short-sale deals before a foreclosure is under way.
"There's still some great opportunities for any buyer, but especially first-time homebuyers with the tax credit," Porter says.