In a seller's market, home buyers feeling squeezed

Melissa Belanger could already picture herself in the house she toured in Waterford with her husband, Bradley. It was in an ideal location and had the number of bedrooms and space they wanted for their forever home, the place the young couple hoped to raise a family someday. The Belangers had been saving money while renting from family members and were ready financially, but despite making an offer of more than $20,000 over the asking price, they lost out to another buyer.

The Belangers lost the next house they bid on, too, this time in Mechanicville. Altogether they looked at more than 20 houses with their agent, Jackie Geraci of Kellie Kieley Realty. They wanted three bedrooms or more, and at least 2,000 square feet. They also had certain school districts in mind. Melissa Belanger grew up in Saratoga County and works as a chemotherapy nurse; her husband works for UPS. When another house came along that fit their needs, they almost passed it by. Priced at $334,900 it was already at the top of their range and the Belangers assumed bidding would push it out of their reach. The house was soon off the market, but the deal fell through, and the couple was in the right place at the right time to be the next in line. They paid the asking price for a 3-year-old Colonial with a fenced yard, four bedrooms and three bathrooms.

"If we had built a house, this is what it would've looked like," Melissa Belanger said.

The Belangers had a surprise coming, too. As a nurse, Melissa qualified for their broker's Heroes Home Advantage program, which provides rebates to firefighters, health care workers, emergency personnel, teachers, police and members of the military. After they closed on the house in October, Geraci refunded the couple a portion of her commission.

The Belangers' experiences are typical of what's going on throughout the Capital Region as low inventory — the number of houses on the market — collides with buyer demand, which is fueled in part by low mortgage interest rates. It's a great time to buy ... if you can find a house.

Geraci, the Belangers' agent, said she's seeing bidding wars at every price range; even buyers looking in the $800,000 to $900,000 range in Albany are getting outbid. Geraci traces the surge back to early in the pandemic. As soon as the restraints on showing houses in person were lifted, the market picked up speed and hasn't slowed down. Geraci said Clifton Park is especially tight; she cited a house that sold for $40,000 over asking. Houses are moving faster than before even in neighborhoods previously thought of as less desirable.

Geraci attributes what's going on now in the market more to low inventory than to buyer demand. New listings in the Capital Region fell 25 percent to 925 listings for the month of February, according to the most recent data available from the Greater Capital Association of Realtors. There just aren't enough homeowners or new-home builders putting houses on the market.

Geraci said she's seeing buyers waiving inspections and coming up with big down payments to make themselves more attractive to sellers.

"When I talk about it with buyers, I tell them to look at least $10,000 below what they're pre-qualified for so they have room to make higher bids. So if they have $165,000 to spend, I recommend looking at houses priced around $155,000," Geraci said.

The market situation pushed Ashley Dingeman and her husband, Tim, into renting after they quickly sold their house in Ballston Spa, which they bought in 2017 for $212,000. They soon found their quarters at the circa-1908 bungalow too tight for two people working from home during the pandemic. They were married in the fall of 2020, and decided to put the house on the market after the holidays. They were shocked when it was under contract within three days. The sale price was $249,900. The couple's search for their next home wasn't as easy. They are looking for a newer house in northern Saratoga County with four bedrooms, a yard and at least 2,400 square feet. Their price range is in the $500,000 range. The long search has shifted their priorities a bit, Dingeman said.

"We're going to be in this next house at least 10 years, so if the kitchen isn't updated, we'll take on a renovation. We want a finished basement, but if it's not finished but at least the potential is there, we'll go for it," she said.

The couple isn't budging on value, however. Dingeman said they don't want to overpay for a house that won't hold its value when the market inevitably swings the other direction. They close on their house in Ballston Spa this week and will move into an apartment while they continue to search.

In Albany, Shakyra Murray is finding out cash is king. Murray decided a year ago she wanted to buy her own home. She started working with housing counselor Alexandria Carver-Noi from Better Community Neighborhoods and paid down her credit card bills to improve her debt-to-income ratio — an important factor when it comes to financing. She is now qualified for a $115,000 loan through the Federal Housing Authority and a $10,000 grant she will use toward her down payment. She has a Section 8 voucher that helps her pay rent, which she can convert into a homeownership voucher to offset her mortgage. A single mother raising a teenage daughter, Murray is proud of how much she's improved her finances. When the stimulus money and tax return checks came, she either paid bills or put the money into savings.

In this market, it's not enough. Murray, a senior scheduler for St. Peter's Maternal Fetal Medicine for 16 years, wants to buy in Albany, where she lives now, so she can avoid a long commute to work. A few weeks ago, she put an offer on a townhouse that would have been perfect and the mortgage payment would've been less than her rent. A cash buyer scooped up the listing.

It was discouraging, so Murray, with the help of real estate agent Tramel Williams of Hunt Real Estate, is now working on increasing her loan so she will have more spending power in the competitive market. Murray is motivated by a desire to have her own place without neighbors above or below her, but she also wants to set an example for her daughter, who Murray said sometimes questions the sacrifices her mother is making to save money.

"I want to show her we don't have to settle," Murray said.