First Time Homebuyers generally look for something affordable, something within their control, something they feel they can keep. They generally don't mind doing some of the repairs needed, if it means getting a fair price. This would mean looking at Distressed properties, like Foreclosures.
The month of April 2011 showed that Irving TX had over 700 properties for sale on the market, but only 113 were actually SOLD (NTREIS). This is certainly indicative of a shortage of buyers. A survey performed by Cambell Surveys
also indicated that overall "gap" continues to widen. The difference between First time Homebuyers and Distress Properties is climbing towards 12 percent, compared to 3% in April 2010.
Part of the reason is that "gap" continues to widen, is that lender generally will not loan on a property that is in of need repairs. Their option would be to seek private investors at a higher interest rate.
Instead of assisting current homeowners with a Loan Modification to keep them in the homes, lenders are allow time to run out and for the Foreclosure to take place, and there the house sits... empty. Not only does it create an eye-sore for the rest
of the neighborhood, but it brings home values down.
Short Sales offer a GREAT remedy to this crisis, but lenders really need to loosen their guideline grip if they truly want to help the situation.