How Do I Buy A Home In This Crazy Market?
You’ve likely heard a story or two about the wild real estate market we are having right now.
Nationally, there are 49% less homes on the market right now that this time last year. In the Washington, DC area, there are 36% fewer homes on the market now than last February, according to the according to realtor.com®’s newly released Monthly Housing Trends Report.
We are in the midst of some of the lowest levels of homes for sale in years, in some areas, decades. At the same time, there are more buyers than ever trying to move all at the same time.
As someone who might be thinking about buying a home, or someone who owns and has considered moving again, you might be wondering how to make that a happen when all you hear about is bidding wars, cash offers, and no homes on the market.
There’s Still A Way
Now more than ever, buying a home means you have to not only be prepared, you need to be strategic and you need to have a creative agent by your side that can find homes that aren’t on the market yet.
But, before I dive into how some of the really good agents do that, I want to first share why we are in this place because one big question I have been asked a lot more recently is… “is this how it’s going to be?”
The short answer is not forever.
So, Why This Is Happening?
There is a “perfect storm” of reasons that have collided all at the same time.
- Low Interest Rates – Many buyers are feeling like NOW is the time to move to their “forever” home because interest rates are low. Although they are historically low, there has been an upward trend in rates here more recently. Freddie Mac reported the average 30 year fixed rate to be at 2.67% at the beginning of 2021 and today, the average is reported at 3.05%.
- Life Changed for Everyone at the Exact Same Time, Forcing Changes in Housing Needs – Because of the pandemic, life for many has forever changed. Many people have been told they will continue to work remotely, even after the pandemic is over, while others have been effected negatively by the pandemic and can’t make the move they were hoping to. Plus, never before have we had such a drastic, nationwide change in lifestyle, making buyers in every market needing to move all at the same time. The entire country is moving and there is high demand for similar housing stock like never before.
- Many Sellers Are “Stuck” With No Place To Go – Many sellers are saying, “I would sell my house if I knew I could get a house, but I keep hearing there are bidding wars and cash offers. There is no way I’ll win, so I guess we’ll just stay put,” again causing less homes to be for sale.
- Temporarily, in February, bad weather—snow and ice—around the DMV caused many sellers to delay putting their homes on the market who normally would have. Although this one isn’t as much of a hit as the others, it’s worth mentioning, as it has made the last few weeks of inventory even worse.
So, What Do You Do?
You can’t just wait for something to come on the MLS. Right now, the realtor that you hire will need to do more to not only find you a great home, but then make sure you get it once you find one. That’s why choosing the right agent for your needs is so important – now more than ever.
Out-of-the-Box Strategies to Find Your Home Now
To better deal with the lack of supply, there are strategies realtors use to find their clients homes when there is little inventory and the competition is fierce. Plus, there are some actions you as a buyer need to take on as well.
And for those of you selling AND buying, you may need to shift your perspective and strategies too.
- Be very clear about what you are looking for in a home. Having more clarity can help your agent look for off-market homes for you. Yes, homes that aren’t officially listed.
- Understand that this isn’t your usual market. Your plans will still come to fruition. Your plans may be delayed, but remember that it’s not forever.
- The opportunities. Despite what your might be hearing, there are still good opportunities out there. There are segments of the market that have less competition and even some opportunities that have been on the market for some time where you don’t need to compete and you could even negotiate more favorable terms!
Matching Buyers to Potential Sellers
When inventory is low, it’s time to get creative and be more proactive in finding a home that’s the right fit and criteria for you. Matching potential sellers with determined buyers can be a win-win for everyone!
1.) Off-market forums and groups. Some realtors will post their buyer clients’ needs to their online groups and forums. If your realtor is well connected, they can work with other top agents in the area who may have listings that are not on the market yet which can be a productive way to find you a home that fits your needs.
2.) Reach out to their homeowner clients. Some realtors will reach out to their past clients who have expressed interest to sell at some point and are prepping their homes for sale. This is another way to find homes that match your criteria. Keeping these potential sellers plans moving forward can help bring more homes to the market.
3.) Write a Love Letter. For buyers who want to live in a specific neighborhood or building, writing a personal love letter to the seller can be a successful way to stand out. It’s not just any letter; it’s one that will appeal to the seller as a person opposed to a contract and could give you the ’emotional edge’.
4.) Being proactive vs. waiting around. Sure, you could sit around and wait until something comes on the MLS, but this time of year, that strategy doesn’t typically lead to the best possible home for your criteria. That’s why, it’s best to take an even more proactive stance when looking for homes when inventory is low. This includes calling other agents who specialize in certain areas or price points, having your team stay in touch with their database, posting on community boards looking for anyone who might have a home that fits your needs!
As you can see, being more strategic and having a plan of action that is more proactive can work when inventory is low and competition is fierce. We just find another way!
If you or someone you know is are looking to move this year, please be in touch well before you are ready to start looking so we can do the prep work, position you as the best buyer for whatever home you want to buy, and prepare you financially for your new home. I hope that using some of these off-market strategies will help you into your dream home soon! If you are in need of a realtor recommendation, one who uses these off-market strategies, please get in touch anytime!
I'm Jordan and I love helping first time home buyers make their first home more affordable and stress-free! It all starts with your personal budget and how much you can comfortably afford. Let me know how I can help you make your real estate dreams come true.
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