That’s great news for sellers, but for buyers, not so much.
There are certain indicators that tell us whether a housing market is favoring buyers, sellers, or neither party over the other. For one thing, rising prices tell us that buyers are willing to pay up for homes, giving sellers the upper hand. The amount of time it takes to sell a home is another important factor to watch. Based on recent data, it’s clear that sellers are winning in that regard.
Homes are selling at a rapid pace
Redfin reports that as of the last week of October, one-third of homes sold in the prior four-week period went under contract within seven days of being listed. Not only does that represent a lightning pace, but it’s also surprising given the time of year, since home buying tends to slow down after the summer rush.
Of course, when homes start flying off the market, it’s a great thing for sellers. But for buyers, it makes for a very difficult market to navigate.
No time to waste in this housing market
Buying a home is a big decision — one you shouldn’t take lightly. In a normal housing market, you can commonly go see a home, take a few days to contemplate it, and then respond with an offer on it — or not.
In today’s housing market, that approach just won’t fly. Like it or not, if you’re serious about buying a home today, you’ll need to be prepared to make an offer the second a home hits the market. That’s because low mortgage rates are fueling a surge in home buyer demand. Since there’s not nearly enough inventory available to meet buyer demand, those who want to own homes are being forced to move extremely quickly.
Making a successful offer
The idea of going to see a home and having to decide on the spot whether you want to own it may be stressful. But there are things you can do to make that process easier on yourself as a buyer.
First, crunch some numbers ahead of time so you’ll know what the top end of your price range is. Next, make a wish list in order of priority so you know what features you really want in a home. If you see a property that checks off your top seven out of 10 items, you’ll know that it’s likely a good fit.
Finally, get a mortgage pre-approval letter. That letter will indicate how much you’re qualified to borrow based on your income and other factors, and it will send the message to sellers that you’re a serious buyer. In fact, having that letter could give you a leg up over other buyers and help you come out victorious if you happen to land in a bidding war.
When homes fly off the market quickly, it makes buyers’ lives more difficult. If you don’t feel comfortable having to rush your home-buying decision, you may want to put your search on hold until housing inventory picks up. Otherwise, just know that in today’s real estate environment, you’ll need to act quickly if your goal is to scoop up a home to call your own.