It’s probably no surprise to say that the real estate market is still running fast and furious. Homes are selling in record time, most with multiple offers, and well over listing prices. This isn’t just our region – it’s happening all across America, as this article from Redfin shows with a bunch of interesting charts.
Note: this article was featured in our February 2022 email newsletter.
We work with a lot of buyers, and it’s easy to feel discouraged right now. We had a buyer last week offer $84,000 over asking price with no contingencies. And they lost when the home received nine offers and went for more than $100,000 above asking price! Ouch!
So, is there hope for buyers? Yes! Here are six helpful thoughts:
- Be ready to move fast – the most attractive homes go into contract the first week they’re available. Think about the highest price you think is reasonable for you, and offer that – consider that an additional $10,000 at today’s rates will cost you about $48 a month more. Is it worth $48 a month to get the house you adore? Yes. It probably is.
- Keep an eye on those homes that linger a little longer – if a home hasn’t sold by the middle of its second week, the sellers are likely starting to get nervous, and you may be able to win it close to list price, without a bidding war.
- Consider homes that need updates or reasonable repairs – it can be better to spend $50,000 on your own sparkling, new kitchen and bathrooms than pitching in that amount (or much more) in a bidding war for the already updated home.
- Experts are saying that rising mortgage rates will cause some buyers to move to the sidelines this spring and summer. If your finances are solid and you can work with these higher rates, at least you can look forward to fewer buyers competing against you!
- We sometimes get lucky and find a great home that’s just not marketed well. Maybe the listing agent posted some poor-quality cell phone pics of the house and didn’t show off its great features, or maybe they didn’t do a good job of writing the listing description. We keep our eyes peeled for these kinds of opportunities – if we don’t have to compete against 20 other offers, we can offer a more sane price and win a fantastic deal.
- It’s good to have an agent who really understands the local market and can show you what that house you love is really worth, based on comparable sales from the last few months. Some sellers are deliberately underpricing homes to generate bidding wars, so when we talk with buyers about pricing, we focus on the price as indicated by the “comps,” not just the listing price.
We haven’t had a buyer yet who couldn’t make it work. It may take some time, but we can get you into a home you’ll love! 🙂
Speaking of rates, here’s a chart from Freddie Mac on average mortgage rates for the past year. You can keep up with their summaries at: https://www.freddiemac.com/pmms
Quick info: the new law on lot splits and additional units
A few months ago, we wrote about a new state law (SB 9) that allows homeowners to divide their urban or suburban lots in two and/or build an additional housing unit on an existing residential lot. The law is in effect as of January 1st, and it opens up a wide range of possibilities for new housing, including the possibility you could become an investor using your own home lot. Take a look at this quick explainer from the California Association of Realtors, including a handy 3-minute video.
Related note: Have you heard of the “missing middle” in housing? It’s the concept that we’ve lost a lot of affordable options in between rental apartments and single-family homes. Things like fourplexes, duplexes, and townhomes. It’s worth reading about.