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 50% less homes on the market right now that this time last year. In the Washington, DC area, there are 35% 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, 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 I do that, I want to first share why we are in this place because one big question I’m getting is “this how it’s going to be.”
The short answer is not forever.
Why This Is Happening
There is a “perfect storm” of reasons that have collided all at the same time.
1. Super Low Interest Rates - Like maybe you feel, many buyers are feeling like NOW is the time to move to their “forever” home because interest rates are so low (but increasing).
2. 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 the at same time. The entire country is moving and there is high demand for similar housing stock like never before.
3. 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 fewer homes to be for sale.
4. Temporarily, in February, bad weather—snow and ice—not just here, but throughout the US, 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, we need to do more to not only find you a great home, but then make sure you get it once you find one.
Out-of-the-Box Strategies to Find Your Home Now
To better deal with the lack of supply, there are strategies I use (and have used for years whenever inventory is low) to find my 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, we 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 us 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; they just may be delayed, but not forever.
Opportunities. Despite what your might be hearing, there are still some 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 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!
Off-market forums and groups. Posting my buyer clients’ needs and working with other top agents in the area who may have listings that are not on the market yet can be a productive way to find homes.
Reach out to my homeowner clients. I reach out to 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.
Letter writing campaign. For my buyers who want to live in a specific neighborhood or building, I use a letter writing campaign that’s been successful for many clients. It’s not just any letter; it’s one that I’ve honed over the years that works to get a response.
Once we know exactly where you want to live, we can use this letter writing campaign effectively any time of year, but especially this time of year since so many sellers hold off from listing during the holidays. There could be eager sellers who don’t want to wait!
Being proactive vs. waiting around. Sure, we 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, contacting past clients, posting on community boards looking for anyone who might have a home that fits a client’s 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 put some of these off-market strategies and others I have as well to work for you!