While this year has seen a strong seller’s market, it doesn’t hurt to use every…
During the past year, we have seen a sharp increase in buyers looking for homes while home inventory remains low. New listings have dropped 16% from last year and the period of time a home is available for purchase has been shortened by 23 days. As a result, both the available homes for sale and the time to find a home is decreasing.
Competition in a Seller’s Market
Rising levels of remote workers and increased time spent at home have created a surge of buyers apt to change their surroundings and lifestyle. Office commutes are becoming less frequent or non-existent as companies rethink their approach to a remote workforce. Families stuck at home are seeing the constraints of their living space more than ever.
Buyers are entering the market with greater flexibility relative to home location, and are looking to satisfy new housing needs. Homebuyers are also feeling a sense of urgency as many are unsure when the currently low mortgage rates will begin to rise. A growing number of buyers believe locking in a good interest rate now is more important than taking their time with the shopping process.
Buyers Shifting Standards to Compete
With the rise in competition and the scarcity of inventory, sellers are reporting an abundance of offers for their homes. Real estate agents are seeing that multiple offers on a single home is becoming the norm, with many buyers even offering to forgo appraisals or inspections. With an increase in digital tours during COVID-19 restrictions, some buyers are even purchasing homes they have not seen in person.
Homes Going for Above Asking
Buyers are also willing to pay above the asking price in the current market. Nationwide, 36% of homes sold above list price in February of 2021, the highest jump on record. The most competitive markets in February were Oakland, Calif., where 70.5% of homes sold above list price, followed by San Jose, Calif. (66.6%); Tacoma, Wash. (65.7%); Sacramento, Calif. (62.3%); and Austin, Texas (57.3%). Meeting the seller’s initial asking price is not enough to make a buyer stand out.
While this may be worrying at first glance, buyers are recovering through the terms of their loans, despite paying more for properties. Some buyers may pay too much in traditionally affordable areas, but many are securing good terms that keep their monthly payments within their budget.
In an increasingly competitive market, it’s crucial to have seasoned real estate professionals on your side. If you are looking for people you can trust in this market, send us an email at email@example.com. We are here as your best advocate for buying and selling.