Sellers Market
/When real estate opened back up in Williamsport after being shut down for two months, I wasn’t sure what to expect. My hope was that people who had planned on buying or selling in the spring would be eager to get back out there. But with Covid-19 and all the personal protective restrictions we now had, I wasn’t sure how comfortable people would be going into other people’s home. Not only that, but there were a lot of people laid off, so buying a home or selling at this time may no longer be an option for many.
To my surprise, the market has bounced back very quickly. Homes that are priced competitively are selling with multiple offers within a couple days. Its hard to get buyers into homes fast enough. As a buyer you need to have all your finances in order because at this time it is definitely a sellers market. So how did this happen?
Less inventory = Higher Prices
There are a couple things going on that have led the country towards a sellers market. For starters, there is less inventory of homes on the market. According to the National Association of Realtors, at the end of January 2020, there were 1.42 million units, including condos, co-ops and single-family homes on the market which was up 2.2% from December, but down 10.7% from the same time last year. January's housing inventory was the lowest it's been in 21 years, according to NAR.
So with less homes on the market, coupled with high demand means higher prices. In January 2020 single family dwellings were actually up 6.7% from a year ago according to Redfin. Now since the shutdown, that number has dropped some, but home prices have still risen from the previous year.
If a home is priced right, it will go quick - and with the reduction in inventory, you will likely receive multiple offers. On the contrary, if you price your home high trying to capitalize on the market, there’s always a chance you will sell it but there is also the chance it will go stale. In my opinion, it’s better to price your home competitively so you can sell quick and get full or above asking price offers.
Low Mortgage Rates
According to CNBC News, 30-year mortgage rates just hit a new all time low of 2.97%. Here is Williamsport, we have seen mortgages rates as low as 2.87%. The mortgage rates have dropped in an effort to help the economy get back on track. It is believed as the economy continues to do better, the rates will rise. But for now, if you’re in the market to buy a home the rates have never been better.
The same could be said for homeowners looking to refinance. Appraisers and banks have been swamped refinancing homes.
Uncertain market
Due to Covid-19, we are experiencing a lot of firsts. Nobody really knows for certain what is going to happen or how the market is going to react. A lot of potential sellers have decided not to sell this year due to a multitude of reasons. Perhaps they experienced a layoff or fear a drop in the market and don’t want to sell until things stabilize. People don’t want to revisit 2008, which is why there is much hesitation surrounding real estate. As with anything, if you are able to buy or sell and the timing is right for you then go for it. Nothing is ever certain and there will never be a perfect time to buy, but there are a lot of perks right now that both buyers and sellers can take advantage of.
If you are in the market, here are a couple quick tips:
Buyer tips
1. Be patient- Homes are going quick but that doesn’t mean you need to make a rash decision. You may have to bid on a couple properties before you get your home. Interest rates are expected to stay low through 2020, so that leaves a lot of time to get your home and still take advantage of the interest rates.
2. Work with an agent- Agents have the inside scoop on homes and are able to get the most up to date information on the market. They also know how to make your offer more attractive to the seller such as all cash offers, waiving contingencies or offering more money.
3. Go the extra mile- Sometimes a personal touch goes a long way. Consider writing a letter to the seller about how much you like the home or how you can envision your family here. Expressing your thoughts could help you get your bid amount.
Sellers tips
1. Spruce up your home- With a tight inventory and increased prices, buyers expectations have gotten higher. Make sure your home presents the best that it can in order to attract full price offers.
2. Don’t get greedy- It can be easy to want to ask more for your home when you are in a sellers market, but an overpriced home will still sit. Pricing your home competitively will better ensure a quick sell with multiple offers than starting high and coming down.
3. Know where you are moving before you sell- Since it is a sellers market, its even more important to know where you are going when your home sells. Your home might sell fast, but you could have a difficult time buying a home if you wait too long.
So if you are in the market, don’t discouraged! The right home is out there. Despite everything that has happened to the economy, right now really is a great time to buy or sell a home. If you have any questions feel free to leave a comment. I’d love to hear from you!
