Demand is up, way up
Someone wants YOUR home. If you’ve been considering making a move, NOW might be a good time to do it. With the Fed pushing interest rates and inventory at a 20 year low, this may the opportune moment to sell your palace and move on to greener pastures….Maybe.
This lack of inventory that makes your home so desirable to buyers is also going to effect the next pool you’re looking to jump into.
“The inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market,” said Lawrence Yun, chief economist at the National Association of Realtors.
A major factor driving price gains is a worsening inventory shortage. At the end of the fourth quarter, there were 1.65 million homes available for sale, 6.3% less than the same quarter a year earlier and the lowest level since NAR began tracking the supply of all housing types in 1999.
The average inventory during the fourth quarter was 3.9 months, down from 4.6 months a year ago.” From Realtor.com
This dip in inventory has created a feeding frenzy in prime (and not so prime) markets.
The real estate lockdown
With every upside there comes the down. With the tightening of available inventory, resulting in an increasing median home price, there is a paralysis in the entry level market. Owners of what were once considered starter homes are staying in their dwellings longer because they can’t afford to go up OR down, putting a strangle hold on that inventory.
This from Inman News
This not only shuts out new buyers, it also limits opportunities for owners who feel they can’t move up. The National Association of Realtors’ 2016 Profile of Home Buyers and Sellers showed that buyers expect to live in their homes for a median of 12 years, while 18 percent say that they are never moving.
The millennial and baby boomer populations are both large, and though traditional wisdom might say that as people age they will downsize and free up more housing, so far that hasn’t been the case.
In his announcement of February data, NAR’s chief economist Lawrence Yun pointed out that existing home sales were down, partly because there is not enough inventory for buyers to choose from.”
It’s time to prepare
If you considering moving up, down, or sideways, start the investigation process NOW.
Here are a couple of pointers
- If you are seriously considering making a move, speak to a REALTOR®.
- Put together a game plan for the sale of your current home AND the purchase of your new home.
- Get an accurate home valuation of your current property.
- You may get more than you ever expected for your home, but remember, the price of homes of equal quality have also gone UP.
- Investigate current properties for sale in desired locations.
- Be flexible. There may be a hidden gem in a neighborhood you’re not familiar with that’s still in that great school district
- Sign up for e-alerts on your favorite real estate website for homes in your desired price point. You want to know when new inventory becomes available the second it hits the market.
- Get your lending arrangements in order.
- Ensure credit worthiness for your desired price point.
- Get a loan approval before you even start the search. You want bullets in your gun before you go out on the hunt. Your perfect home is elusive and will disappear if you don’t have lightning reflexes (and a letter from your bank).
- Start saving. You want to be cash heavy for down payments and closing costs. Don’t assume that you will be able to use the proceeds of your sale to cover those expenses, even though it may work out that way. It’s always good to have cash.
Don’t be afraid, knowledge is power. You can still get a great price for your home and find a new place to settle into,.. but you need to be a real estate ninja. Do your homework, don’t get stuck living in the Super 8 while you try to find your next home. Or even worse, find yourself behind the eight-ball having to buy something you don’t want out of necessity.