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Tips for home buyers during a seller ’ s market
Acombination of factors , including low interest rates and a pandemic-driven decision by many city dwellers to look for houses in the suburbs , has created a housing boom for much of 2020 and 2021 . That boom has created an undeniable seller ’ s market in real estate .
Just what is a seller ’ s market ? The financial resource Investopedia defines it as a marketplace in which there are fewer goods for sale than there are interested buyers , giving sellers the ability to dictate prices . Since mid-2020 , there has been an extremely low inventory of homes for sale but a very high interest among purchasing parties .
Data from the National Association of Realtors indicated that , by the end of February 2021 , housing inventory fell to a record low of 1.02 million units . These factors have led to a surge in competition from buyers , including bidding wars on homes and all-cash offers to entice sellers . In December 2020 , the median listing prices for single-family homes shot up 13.4 percent from the same time the previous year , according to Realtor . com , and it hasn ’ t slowed down much since . Jeffrey Mezger , a 40-year veteran of the real estate industry and CEO of KB Home , says it ’ s the best seller ’ s housing market he ’ s seen in his career .
So where does this leave buyers interested in relocating ? Here are some tips .
• Consider areas with slower overall price growth . Experts say the southern and midwestern United States offer the best value for home shoppers because of their meager price growth . ClearCapital , which tracks housing values , says San Antonio , St . Louis and the Dallas / Fort Worth areas experienced the least price appreciation from 2019 into 2020 .
• Get preapproval or have your funds ready . Speed is the way to go if a buyer is interested in a property and wants to make an offer . Real estate professionals say buyers should be “ offer ready ,” which means having a mortgage preapproval letter or proof of funds for a down payment ready to go . Failure to have funds in check can slow down the process or compel sellers to reject an offer .
• Work with a real estate agent . These are complicated times and it pays for buyers to have a professional working in their corner . A real estate agent uses his or her knowledge to make a timely offer and negotiate on the buyer ’ s behalf . He or she also will provide insight into specific neighborhoods , amenities and school districts .
• Eliminate certain contingencies from the equation . Contingencies are factors that must be met before a sale can go through , according to the relocation site Moving . com . A common contingency is the need to sell one ’ s current home before closing on another . Asking for extended closing periods or certain home repairs are some additional contingencies that can make buyers less attractive to sellers .
• Make it personal . Buyers can offer a personalized note with the offer that may connect with the seller emotionally and set one them apart from others who have made similar offers .
Buying in a seller ’ s market can be challenging . But some strategies can set buyers apart from the pack . n
30 February | March 2023 Thomasville Scene