What Do the Record Low Number of Home Listings Mean for You?
- Author: Jacob Greene
- Posted: 2023-12-18
As we move into the new year, the housing market continues to heat up. With plenty of motivated buyers and a lack of interested sellers, most housing regions are facing an inventory problem. Whether you are a homeowner looking to sell or someone trying to buy a new property, this housing trend can have a huge impact on your next move.
The Number of Available Homes for Sale Falls to a Record Low
In January and February, the number of homes on the market dropped rapidly. Cities that used to have thousands of homes available for sale now have far less. Altogether, the number of homes for sale is around 30 percent of what it was before COVID. These numbers are so abnormally low that they are setting records. The supply of existing homes for sale has not been this low since 1999.
This decline in inventory is happening because far fewer people want to risk selling their homes with so much financial uncertainty. Furthermore, real estate prices are rising, so many homeowners do not like the idea of ending up with more debt and a higher mortgage. At the same time, more apartment dwellers are attracted to the privacy and space offered by home owning. With a higher demand for properties, houses for sale are getting snapped up almost as soon as they are placed on the market. Anyone selling a home now has a hot commodity that they can ask a premium price for.
Home Buyers Face New Challenges
The low inventory can be helpful for those looking to sell properties, but it also means that things are trickier for those looking to buy. A January survey found that the main reason people are not able to get a home right now is because they are being outbid. Over half of all buyers who put in an offer on a home end up in a bidding war. Just
For some, this can just be a mild inconvenience that causes them to pay a little more than planned. However, for many, the increase in bidding wars is disastrous. More and more homebuyers are struggling to find a home they can afford. In addition to having higher prices, homes are also selling incredibly rapidly. A buyer who is looking for a home might see a listing they like in the morning, but it might be off the market by evening.
How Buyers Can Find Affordable Housing Options
Times might look grim for home buyers, but they are not hopeless. Understanding how the real estate market works can provide potential homebuyers with tips for getting their dream home even during a hot market. First of all, you need to take a close look at your budget and finances. Recognizing that home prices are rising can ensure you avoid wasting time chasing after homes you cannot afford. Try to start searching for a home as quickly as possible, so a short timeline does not pressure you to close on a pricey home.
Next, remember that a high profit is not the only thing home sellers want. Many also want convenience, reliability, and a buyer who will appreciate their home. Try to think of ways you can make your offer more appealing to the seller. Getting preapproved before making an offer will appeal to sellers by shortening closing time and showing you are a serious buyer. If the home is a historic property or a beloved family home, writing a letter that promises to cherish the property can go a long way towards easing the seller's concerns.
If possible, try to talk with the seller's agent and learn about concessions they might want. For example, if the sellers want to stay in their house until the end of their child's school year, agreeing to buy now but wait to move in can appeal to the seller. Other potential negotiations include things like letting the seller keep the appliances or agreeing to waive contingencies and inspections.
Ultimately, the higher prices and limited availability add some new challenges to house hunting. However, with smart decisions and help from professionals, it is still possible for both buyers and sellers to be satisfied with the deals they make.
