Is owning a home possible without a lucky break, some buyers wonder

When Adbul Malik and his wife, Iqra, first learned that they were expecting a second child, they knew they were going to need a bigger home than the small townhouse they were renting. Knowing the Ontario, Canada market was a competitive one, they didn’t waste any time putting in offers, but after being outbid on some 20 homes by $30,000 to $80,000 each, they quickly become discouraged.

Malik reached his breaking point in April last year after losing the bidding war on two homes that each sold for $150,000 over asking price.

“It was heartbreaking, particularly since my wife fell in love with one of those homes,” said Malik, a 34-year old account executive. “It was too stressful so we decided to take a break.”

That summer, Malik and his wife paid off their student loans to become stronger candidates, and after their mortgage broker re-qualified them for more money at a better rate, he offered them something they couldn’t refuse: first dibs on his home, which he was considering listing.

“We were incredibly lucky,” said Malik, who closed on the home shortly after the birth of his second child.

Many other buyers haven’t been so fortunate given the lack of supply and the unceasing demand for U.S. real estate, which have “pushed average home values over seven figures in hundreds of cities for the first time,” said Jeff Tucker, senior economist at Zillow. That’s made would-be buyers like 43-year old Shaun Martin of Denver Colorado start to lose confidence.

“Last summer, we made a ‘terribly strong’ offer on a house we were certain we would get and it was demoralizing when we didn’t,” he said. “Prices are still skyrocketing to unimaginable heights and I am really starting to wonder if owning a home is in the cards for us if we choose to stay in Denver.”

This attitude is prevalent in many markets, said Jeff Lichtenstein, president and founder of Echo Fine Properties in Palm Beach Gardens, Florida. “There’s a lot of anger and frustration over prices right now.”

Lichtenstein said he spends a lot of time educating buyers so they can better understand why the market is the way it is and what they’re up against. “The market is being set by the ‘must buy,’ someone who needs shelter because they sold their home, for example, or got kicked out of a rental,” he said.

“I tell buyers that in a normal market, you might get 85% of what you want. In this market, you’re only going to get 50% of what you want and if you get 50%, you’re going to be thrilled,” he said. “There will be all sorts of things wrong with the house and you won’t like it, but the ‘win’ of the deal is getting the house.”

Alyssa Regan, an agent who works with Lichtenstein at Echo, knows this firsthand.

Anxious to dodge a 20% rent increase for the renewal of her townhouse in Palm Beach Gardens and looking to capitalize on low mortgage rates (now up to nearly 4%), she started looking for a place in Jupiter Farms, Florida, about six months ago.

After losing a couple of bidding wars, Regan made a blind offer on a single-family home in a less expensive area she previously hadn’t considered — Palm City. She even waived the inspection to get the deal done. “When I went to see it, it wasn’t as good as I thought.”

Nevertheless, Regan just signed the closing documents. “The floor plan and layout work for me, but I’ve got to redo two bathrooms,” she said. “I was just in there scrubbing grout for six hours, but it’ll be nice when it’s done.”

“I’m just thrilled to have my own place.”