In a So-Called Buyer’s Market, Buyers Can’t Find Homes
August 13, 2012
Many home buyers are now surprised that finding their dream home isn’t as easy as they expected. In what market researchers keep calling a buyer’s market, home buyers are having a hard time finding what they want.
We’re seeing more home buyers lose out on homes because there aren’t enough homes on the market for them to see. When they do find a home they want to make an offer on, some are getting outbid on the home and have to start all over again.
Watch John and Anthony on FOX25 Morning News Explain Why Buyer’s Can’t Find Homes
Several factors in today’s market are causing the increased competition for homes.
Low Inventory of Homes
The low inventory of homes on the market is actually making it hard for buyers to find homes.
In our Mid-Year report we outlined that one of the factors showing an improvement in the housing market is the lower inventory of homes for sale. Currently there is just a 5 month supply of homes available for purchase in Massachusetts, its lowest number since 2005. According to a press release from the Department of Commerce July 18, single family housing starts were up 4.7% in June compared to May, but it’s still not enough to keep pace with demand. This increased competition for homes affects both the demand for homes and the selling prices. As soon as a home comes on the market, buyers show up and make offers, especially if they have been looking for a long time.
Some Listing Agents Are Pricing Homes Too Low
We are seeing more and more buyers get outbid on homes that may have been intentionally priced too low.
In some cases, listing agents are purposely listing homes below their market price to take advantage of the low housing inventory, which triggers bidding wars. This can be an advantage for sellers, but it’s really hurting buyers trying to find a home. Buyers spend all the time driving with their agents looking at homes only to lose the home at the last minute because of multiple offers.
Home Buyer Tips:
Some buyers don’t believe their agent when they say their offer is too low and that there could be a higher offer from another buyer. The buyer may be hesitant to increase their initial offer because of news reports saying home prices have dipped, only to lose the home to another buyer.
Buyers need to trust their agent when it comes to home pricing information and making an offer. Remember, an experienced real estate agent deals with many real estate transactions every day. They know the trends in the market, what has sold in the neighborhood, and ultimately what will work best for you. If you don’t trust your agent, fire them!
Be ready to move fast! As soon as you see a home you want come on the market, don’t wait to view it. Have your agent show you the home as soon as possible and be ready to make an offer. If you put off seeing a home you like, it could be gone.
Write a personalized offer letter. This is something we’re seeing more and more, and it’s very effective. It’s a great tactic that sets you apart from other buyers interested in the home and shows the seller you are the right person to own it. It establishes clear communication between you and the seller, and it can make the difference between getting the home and losing it to someone else.
Overall this lower inventory is a good thing for the market, although buyers may not like it since they have had the upper hand for a few years. We are now in more of a balanced market: in other words, not a buyer’s or seller’s market.