Blog posted On December 17, 2019
If you’ve been house hunting in recent months, you’ve probably noticed fewer homes for sale. Many regions are dealing with housing inventory shortages, and the data proves it. Last month, the Census revealed that just 9.8% of the US population moved from March 2018 to March 2019, the lowest level since the Census started recording data in 1947. This lack of mobility is leading to a shortage of available homes for sale and creating competitive markets where buyers need to move quickly or may face bidding wars.
From the 1940s to 1970s, an average of 20% of Americans moved. In the 1980s that figure declined to 18%, by the 1990s it was down to 17%, and in the early 2000s an average of only 14% of Americans moved. Although some of the decline is due to Baby Boomers living longer and aging in place, Americans of all ages do not seem to be moving, because there are not a lot of homes to move into.
This year, home sales have experienced some volatility, though with recent rate cuts, most markets have seen sales swing upward through the end of the year. Still, construction needs to pick up to replenish housing inventory in many markets. National Association of Realtors (NAR) chief economist, Lawrence Yun, commented, “home prices are rising too rapidly because of the housing shortage, and the lack of inventory is preventing home sales growth potential.”
If you’re shopping for a new home in a competitive market, here are some tips to getting your offer accepted:
Get Preapproved for a Mortgage
When you get preapproved for a mortgage before you start shopping, you already have an idea of how much you can spend on a home and what your budget should be. Your mortgage preapproval will also help you make a stronger offer because it shows the seller you have already started the financing process and can ensure a faster closing. Many sellers are on a tight timeline, especially toward the end of the year. When you get preapproved with us, we already start underwriting your loan, so all we’ll need is the appraisal to finish closing your loan.
Make a List of Wants, Needs, and “Nice to Haves”
Buying a home can be an emotional experience, it’s important to not get attached to the details. Remember, the only thing you can’t change about a home is its location. It may have the perfect kitchen but if it’s going to add an hour to your commute is it worth it? Make a list of what your home needs, what you want it to have, and what would be nice to have, and stick with it. Did you know there are financing options specifically for homes in need of repair or renovation? If you know your home will need an extensive repair, talk about it with your Realtor and loan officer. The seller may be willing to negotiate, or you could use renovation financing to make your purchase.
Work with a Realtor
Some home buyers don’t want to work with a Realtor or real estate agent because they want to save money. Although you do pay your agent when you close on your home, they can save you money along the way. You can browse homes for sale on free online listing services, but your agent will have early access to listings and can give you more options, which is especially beneficial in a busy market. Your agent will also negotiate on your behalf when it’s time to make an offer.
Buying a home in a busy market is possible when you’re prepared. Working with the right real estate team can help you find the right home and make a stronger offer when you’ve found your home.