If you've been watching the real estate market lately, houses are selling faster than the new PS5 at the holidays, or Cabbage Patch Kids if you're more in line with my generation. The simple laws of economics are wreaking havoc on the market. With money being so cheap to acquire through financing due to all-time low interest rates, the demand for homes is insane. Homes are being listed at 9am and not even making it until lunch time before they are already under contract in some cases. With supply levels not meeting the demands of the market, your home just might be what someone is waiting to purchase. Here are a few things you should expect to expect when listing your home for sale in today's environment with a trusted Realtor®.
Of course, you think your home is perfect. It is YOUR home! However, as you prepare to list your home, buyers are going to be looking for any excuse to negotiate a strong position by pointing out the blemishes you may not know about in your mecca. Pre-inspections are a great way to not only identify the areas of opportunity that could help you and Realtor® decide whether to list a home as is, to list after improvements are made with your Realtors® input on the ones that yield the highest return and, most importantly, transparency to the buyer. Pre- inspections speed up the transaction process as buyers may forgo having their own inspection done if you already show them your house is ideal to sell, but ideal for them.
LET THE BIDDING BEGIN
It is not uncommon to see a bidding war in today's market. Like fighting over the last cookie in the cookie jar, these buyers aren't going to stop until they get what they want. This is where your Realtor® plays manages your best interests. Leveraging Escalation Clauses allows bidders to put a ceiling on their offer, having it automatically increased if a bidding war ensues until it reaches their threshold. However, bidding banter doesn't always lead to a better outcome. Sometimes, too many bids discourage buyers causing them to get nervous and back out. Your Realtor® is there not only to manage your interests but the emotions a bidding war can bring to buyers.
CONTROL WHAT YOU CAN CONTROL
We all want to be in control but sometimes we just have to let someone else do the heavy lifting. From a seller side, there are two things you are in complete control over: condition and price of the house. While your Realtor® will advise you on staging and price points, these really are up to you. Keeping a clean house and organized for showings make people feel more at home in a calm, comfortable environment. Remember, the way you live in your home is different than the way you sell your home. Also, the price is what YOU want it to be. Your Realtor® will have data to help you make the decision but, ultimately, it is your decision. When
it comes to exposure of your home, that's where your Realtor® is in charge. From listings, open houses and targeting of prospective buyers, your Realtor® is the one who controls the visibility and awareness that will ultimately bring people in. These three things must work together and, when they do, great things happen, like homes selling before Happy Hour starts so you can celebrate.
Look, there is no guarantee your home will be the next success story that sells an hour after it is listed, so setting your expectations is key. However, if you listen to the market, there is no better time to list your home. Working with a Realtor® will help make turn your expectations into a reality.
So much for 2020 vision, right? All of the play on words that last year was supposed to be a year of clarity was bull sh…not true. Whether it was a pandemic or social and governmental unrest, last year was anything but a moment of clarity. However, with all of the turmoil and challenges, the economic impact it will have on 2021 is clear, at least it is to Dr. Lawrence Yun, Chief Economist of the National Association of Realtors ®. I'm probably not on his Favorites in his iPhone but I was privileged enough to hear him speak, addressing the forecast for this year and how it will impact the purchasing power you have for homes this year.
A NEW APPRECIATION FOR SAVINGS ACCOUNTS
One of the elements Dr. Yun spoke about was the newfound appreciation last year provided us for Savings Accounts. Bank deposits are up more 2 times from this time last year. Given the struggles we all went through last year, a bailout might not always be there for us. While bank deposits are up, according to Yun, it is more encouraging to hear that, on average, Americans are saving more, approximately 15% of their paychecks, for a rainy day…or another pandemic. What this does translate to is the fact that buyers will have more to put towards a down payment than usual, making them more attractive to banks for home loans and sellers for properties that once may have been out of their price range.
PREAPPROVALS MEAN A GREEN LIGHT FOR SELLING
With all of these savings, there is a higher level of preapprovals than we have seen in the past. Dr. Yun shared that a surge in Q1 and Q2 preapproved buyers means that they are not only getting the green light to purchase a home, but sellers who have been on the fence about selling their homes should get off the fence and get a FOR SALE sign in their front yard to put their homes on the market. Buyers not only have the money but now are being preapproved, making it the proverbial "win-win-win" scenario.
NEW CONSTRUCTION WILL IMPACT SELLER'S MARKET BY SUMMER
If the early bird catches the worm, early sellers of homes in 2021 are going to have a feast at their disposal. New construction for single family homes is projected to continue to rise for another consecutive year. The decision of in-market home buyers to choose to build over buy is going to be the biggest impact on sellers. This decision to build is forecasted to contribute to the slowing of this Seller's market by summer, according to Dr. Yun. So, if you are trying to decide on whether or not to sell or not, you window of opportunity may be closing faster than you think.
BUYERS SHOULD BUY NOW
It may sound cliché and like a sales pitch from, "Wolf of Wall Street," but if you are looking at buying a home, you should buy now. Dr. Yun is projecting that home prices will rise by a minimum of 8% this year. With the 7.6% increase from last year, home prices will see a 15% increase or more since the start of 2020. If that is not reason enough, interest rates continue to be at an all-time low but, you guessed it, not for long. By the Summer of 2021, interest rates are expected to climb above 3%, impacting the payment and interest for buyers.
If we learned anything from 2020 is that we should always prepare for anything, including me serving as a second term as President of the Youngstown Columbiana Association of Realtors®. While I don't have a crystal ball, I do have Dr. Yun to lend some insight into what we can expect this year as it relates to the housing market. I may not be a doctor, but I am someone who is just looking to make your 2021 better than last year. Here's to doing that together.