In the market we are having an inventory challenge with our real estate market. There are simply not enough homes right now for sale to meet the buyer demand. Many homeowners are sitting on the sidelines, happy about what the increase demand is doing for home values, but they don’t want to tap into their home’s growing equity by selling their home and moving up for fear they either can’t find a home that was worth their leaving or they will have to compete with other buyers. First time homebuyers are sitting on the sidelines, not sure how to make a move.
Although the perception is that few opportunities exist in the market for buyers right now, this is a market that you can take advantage of. Here are misconceptions about the market and the facts:
|Myth:||Fact and Strategy:|
|All homes are selling as soon as they come on the market. I won’t be able to react that fast!||Although many homes are selling within a week of hitting the market (which provides enough time to see the home once or twice, do a preinspection, and write the offer) there are some homes that languish on the market for two weeks, a month, or even longer. The average days on market in our area right now is 24 days.|
|All homes are selling for multiple offers!||Many homes are selling for multiple offers, but for some homes with a limited buyer pool or even homes that simply place second or third in the listings that came on the market during the week may not receive multiple offers. And some homes with multiple offers only have two or three offers. Not all homes get 20+ offers.|
|Homes are selling for 30%, 40%, or 50% above list price! I don’t know what price range to search for a home in!||In our market, the list price to sales price average is currently 105%. That means that homes, on average, are selling for about 5% more than what they are listed for. Although we need to discuss your personal strategy, if your budget is $400,000 for a final sales price for a home, we should be looking around the $375,000 price point based on these averages.|
|If I sell my home I am worried I am going to have to settle for something I don’t want or be homeless.||This is a common concern, but there are options such as a short-term rentals or even renting your home back from the buyers. I realize moving twice isn’t your ideal situation, but renting for a month or two from a homeowner via Vacation Rentals By Owner (VRBO) or AirBNB may give you the breathing room you want AND will put you in a better position when you do make an offer since you won’t have to sell your home first.|
|The market can’t go up much more. I think I will stay put.||The market can absolutely continue to go up. In the 80’s it was unfathomable that the Dow Jones Industrial Average would break 10,000 and now we are almost at 20,000. In our area, median sales prices have increased 20% over March 2016 median sales prices. That means if you bought a home for $350,000 last March it could be sold for $420,000 today. You don’t want to be kicking yourself a year from now if prices increase another 7%, 10%, 15% or more. And remember, the more home you own, the more equity a gain will bring!|
|If I have to move out of the area, I won’t be able to make a move quickly if I buy a home.||First time homebuyers may be concerned about moving from the flexibility of renting to owning a home. However, most property managers require a lease of six months or a year, so if you were in a lease and had to move, that is similar to the challenge of having to sell a home that you purchased.|
If this has you thinking that buying or selling now is an option worth exploring, call or text (253) 222-2626 or send an email to email@example.com. All it takes is a little strategy to potential reap some big rewards!
About the Author:John has been a licensed Real Estate Broker and Realtor in the state of Washington since 2003. He's earned many professional designations such as the Certified Residential Specialist, Graduate of the Realtor Institute and the Accredited Buyers Agent. When John isn't assisting buyers, sellers and investors, you'll find he and his wife flying around the Puget Sound taking full advantage of John's private pilot's license. When they're not flying, they're likely hiking, snowshoeing, really just enjoying all the great northwest has to offer!