How hot is the housing market this year?
So hot that this is the best time since the peak of the 2006 housing bubble to sell a home, with buyers offering more than asking price in many desirable neighborhoods all around the country.
Home buyers frustrated
Angela Staverman knows how stressful it can be to hunt for a home in a hot neighborhood. She and her husband Kevin made four offers before a seller said “yes.”
“We didn’t have the luxury of thinking about it or sleeping on it overnight,” she said. “Most of the houses would have been gone if we would have waited.”
“It’s hard,” Kevin Staverman said. “We’ve had to be pretty much on call any time a house goes on the market.”
Normal rules of buying don’t apply
Forget the usual suggestions about offering 10 percent below asking price and setting up contingencies, such as an allowance for a new air conditioner.
With inventory tight in many desirable neighborhoods, prices are at all time records.
The Staverman’s realtor Susan Huff understands their frustration.
“When homes come on the market, they are sold that evening or the next day,” she said.
Sarah Mikhitarian, senior economist of real estate site Zillow.com, tells us it is a trend she is seeing all over the country.
“Nationwide, we’re seeing the fastest appreciation we’ve seen in 12 years,” she said. “Home values are up 9 percent year-to-year.”
Increase your odds
So if you are trying to buy a house in a red-hot market right now, what should you do? You could wait until fall for less competition, but mortgage rates could go up and inventory may be even tighter then.
So there are a number of things you can do to make sure you don’t show up and find your dream house has already been sold.
Suburban realtor Lynn Schwarber has one big piece of advice: “You’ve got to rush out the first day a listing hits the market,” she said.
So what can you do to improve your odds? Schwarber says:
- Sign up with a buyer’s agent who can alert you to new listings immediately. You don’t pay them anything upfront: you just agree that they will represent you and get a cut of the agents’ commission at sale time.
- Visit a new listing that day, never waiting until Saturday or an open house on Sunday.
- Be prepared to offer listing price, because someone else will. Better yet, make it an escalating offer, where if someone else offers more than asking price, your bid automatically goes up (just like an auction).
- Have a lender’s letter of pre-approval in your hand.
- Write a personal letter to the owner.
“Make it a personal letter to the seller,” Schwarber says. “Tell them about your family, because a lot of times sellers will pick you if they can relate to that.”
What about just building a new house? Realtors say it’s very hard to find inexpensive new construction anymore, because building costs have gone up so much in recent years.
The Stavermans say they just hope to find a nice, existing home, and don’t have to overpay for it.
As always, don’t waste your money.