This week, Cherie and I got back to basics and talked about first time homebuyers. Comprising 40% of home purchases in the Northeast, first-time buyers play a key role in the housing market. They are the source of new demand for homes and make it possible for owners of entry-level properties to trade up; creating a ripple effect that carries over to the higher-priced sectors of the market.

For homeowners, it is the long-term gain in house value that builds real wealth. Home ownership builds wealth in two ways: through the “forced savings” of paying down a mortgage and through appreciation - the rise in the home’s value over time. The earlier you get in the game, the quicker you can get that appreciation working for you. The longer you wait…

The Federal Reserve’s Survey of Consumer Finances has consistently found a huge gap between the wealth accumulated by homeowners and that by renters:

This Week’s Real Estate Insight:

That “forced savings” aspect I discussed works only if you can keep your hands out of the cookie jar. Your home is not an ATM machine, it’s too easy to drain away your wealth with home equity loans and lines of credit.

The internet has changed just about every aspect of our lives. It was about 13 years ago when the first home listing appeared on line. Today Internet listings are such an important part of our industry, it’s tough to remember a time when they weren’t available. Fortunately, from early on, I had people in my organization that “got it” and today, Residential Properties has a network of three Company owned Websites, as well as a presence on countless affiliated sites.

Newspapers have been changing as well. In 2005, According to the Pew Research Center for the People and the Press, 73% say they prefer the digital version of a newspaper to the print version because it is more convenient.  Only 8% told Pew they preferred the net because it was free. Control and interactivity is a major appeal as well as the variety of viewpoints.

Which leads us to ask, why do we spend a half a million dollars every year on newspaper advertising?   Many sellers value print advertising because they see it, feel it and they also feel that there is an investment that the agent is making in their listing with print advertising. I see the emerging trend being toward Internet-based advertising now that we have the traditional home buyer in the minority using print advertising.

This Week’s Real Estate Insight:

Surveys show that over 70 percent of home buyers start on the Internet.  A person buying a paper may not be interested in buying a house but the half a million or so page views residentialproperties.com, rirealestate, and realestateinsight get every month represent interested buyers and sellers that we convert to clients through good old fashioned service. Now the hard part is convincing the sellers that they don’t need those expensive and ineffective ads.