Frenzied real estate market comes with regrets for most homebuyers
Multiple bids, cash offers and fast sales created a real estate frenzy in desired locations…
Multiple bids, cash offers and fast sales created a real estate frenzy in desired locations in Maine and across the nation that has led to 70 percent of buyers having at least one regret, a national survey found.
The top regret cited by about one in five purchasers in the U.S. was underestimating the total cost of buying a home, according to a recent survey by HomeLight, an online real estate marketplace. That includes higher down payments, higher prices fed by bidding wars and more routine things like insurance and maintenance costs.
Some rushed to buy before mortgage interest rates rose further. Rates have been below 3 percent for much of the past couple years, but inflation pressures have pushed them up since February to a national average of 5.42 percent this week for a 30-year fixed mortgage, the highest rate since April 2010.
The Federal Reserve is expected to raise interest rates by half a percentage point this week, which will push up mortgage rates and interest rates on credit cards, auto loans and other types of consumer lending.
Some 20 percent of those surveyed said they bought a home too fast and 40 percent bought an older or smaller home than they initially planned.
Another 22 percent felt they had overspent and an equal amount said they had underestimated maintenance costs. HomeLight surveyed 1,620 people across the U.S. in January who had bought or sold a home in the past 12 months.
Homeowners should expect to spend $4,000 to $5,000 a year on general home maintenance, Jordan Brigham, owner of Ace Handyman Services in Scarborough, said.
“One of the bigger challenges and surprises that people are running into is the cost and the time they may have to wait to get some of these projects done,” he said.
The survey did not break down results for Maine, but it is not uncommon for homebuyers to feel some kind of remorse, real estate agents said.
About one-third of homebuyers in Maine are from out of state, many seeking a safe haven during the pandemic, according to local real estate figures. With 20 percent of U.S. homebuyers using virtual open houses, some have found unpleasant and costly surprises when they finally visited their new home.
That reflects the findings of a Zillow survey in February of 2,000 homeowners who bought in the past two years, with one-third saying their new home needs more work or maintenance than they expected and a similar percentage saying they regret buying a home that is too small.
But out-of-state buyers also are finding advantages, Matt Lamontagne, a real estate agent with Signature Homes in Portland, said. About 80 percent of his sales are to out-of-state buyers, who often are moving from more expensive states.
“Their money goes further here,” he said.
