We’re hearing from our clients and they’re confused; especially those who took their homes off the market or decided to put off buying a home during the shutdown.
Many are ready to jump back in but the housing market news has them confused. “The media says the market is changing but we don’t know if that is good or bad news for us,” is a common complaint.
We did a quick survey of housing market news this morning and found the following headlines:
- High demand, low interest rates make for perfect housing market
- Housing market looking to rebound from pandemic
- Higher May numbers indicate recovering housing market
- The Housing Market Will Lead the Post-COVID Economic Recovery
Overall, the market seems to have bounced back to where it was prior to the shutdown, with another competitive summer market on the way.
Still not enough homes on the market
It’s not that homeowners aren’t listing their homes for sale. In fact, in May of 2019, more than 12 million homeowners said they plan on selling their homes within the next 18 months, according to a Harris Poll.
A recent survey by a national real estate company found that 25% of homeowners who had planned on selling in 2020 have decided to put off selling their home for the foreseeable future.
More than half, however, either adjusted their listing price, took the home off the market until restrictions were lifted or haven’t changed their selling plans at all.
This is good news for inventory-hungry homebuyers who, pre-pandemic, were snatching up listings as soon as they hit the market. Many experts expect a rerun this summer.
Multiple offers – they’re baaaaack!
This is mainly due to the lack of homes for sale. Same old story, right?
Will there be multiple offer situations? There already are, in pockets, across the nation. According to yet another real estate company’s survey more than 40% of the company’s buyers faced bidding wars through early May.
So, yes, multiple offers are becoming more common in the post-pandemic real estate market. If inventory remains low and the number of homebuyers in the market increases, as it does each summer, there is a very real possibility that you’ll meet with competition for homes in good condition.
Homebuyers need to be fully prepared to buy. This means seeing a lender and getting pre-approved for a mortgage. Lending standards have tightened, so even if you were pre-approved before the pandemic’s outbreak, you should check in with your lender to ensure that you can still qualify for a mortgage.
It also means not making any large purchases on credit or applying for new credit from the moment you obtain that pre-approval letter until you close escrow.
Here are a few other tips to put you in a more competitive position as a homebuyer:
- Choose your real estate agent carefully. Your agent will be the person who sells you to the sellers…select someone other agents and sellers want to work with
- Consider that you may need to increase your offer above asking price. Can you afford to do this? If not, vow to look only at homes at a price point that allows you to be competitive in a multiple offer situation.
- If you are in competition you are no longer in negotiations, you are in an auction. Work with your agent to combine your terms so your interests remain protected, but you are strong enough to win that home you fell in love with.
- When sellers have multiple offers they often pick the buyer as much as the offer. Treat all offers like a job interview and do everything you can to stand out above the other candidates.
Summer is here and the market is heating up. It is so important that you work with an expert team to help you navigate the process and negotiate on your behalf.