iowahomeloans

Fewer Homes for Sale Mean Facing the Competition

Posted on: August 22, 2013

The real estate market has definitely improved – which is great news for homeowners, but less great for buyers. The residential real estate market has shifted to a sellers’ market as fewer homes are for sale, and the homes that are on the market are selling more quickly. Buyers now face competition in the form of multiple offers and rising home prices just to have a chance at buying a home. If you’re thinking of buying, you’d better make sure you’re ready to face the competition.

 

Number of Homes and Number of Days on Market are Down

The specifics vary depending on the market, but overall it looks like the average number of homes for sale and the average number of days on the market are both down by 30 percent compared to this time last year. This means that there are fewer homes for sale in general, and the homes that are for sale are selling faster. With these sort of limits in the housing market, would-be home buyers are now being forced to face the competition – or give up and try again to buy a home later.

 

What to Know about Picking Your Battles (Or Bidding Wars)

 

  • Research the inventory. How long are homes on the market in the neighborhood you’re considering? How many active listings are there versus the number that are under contract? If there are a goodly number of homes on the market, you can bid up the price and the house could still sell for more than it’s worth. If numbers are tight, though, a bidding war might mean overpaying.
  • Watch employment numbers. If there’s strong employment, you’re more likely to face a bidding war. If you can find a market where employment is less strong, you can pay less for your home – but it may also appreciate slower in an economically-challenged marketplace. It’s a fine line, so find the balance.
  • Don’t go to war over the wrong property. A foreclosure sells for about 36 percent less than a regular listing – but if you bid it up 30 percent in a bidding war, you’re losing out on the price cut. Pick the right property before you go into a bidding war. Know how much it’s worth – and don’t overpay. You may have to look longer, but at least you won’t be locked into a mortgage that’s too high on a property that’s not worth it.
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