Couple looking at house online - housing market

If you are a first-time home buyer this summer, you probably have already been feeling the burn, so to speak. If 2017’s housing market was difficult for those seeking starter homes, this year is looking to be even tighter. Spring has been very busy already, and it’s not likely to let up as summer progresses.

While searching for a new house, it’s best to be informed. According to Forbes, which has analyzed the data and research this spring, more buyers are as informed as they can be going into this season.

If you are one of them, it’s probably because of the disappointment you, or your friends, have experienced while looking for a home. Here are the facts:

  • Inventory has been declining steadily for 42 consecutive months. It’s down almost 9% from last year at this time.
  • Average days on the market have fallen by 5 days as well.
  • Starter home prices have risen 9.6% this year over last year.
  • Trade up and premium home prices have risen as well - 7.5% and 5.2%.
  • Mortgage rates are on the rise as well - 4.66% at the end of May, which is ¾ of a percent higher than this time last year.
  • 40% of buyers are planning to put more than 20% down.
  • 40% of buyers have been actively looking for a home for more than 7 months.
  • 60% of buyers are still hoping to close on their dream home within the next 6 months.
  • More than 25% of buyers plan to offer above asking price.
  • 31% of buyers are planning to put a larger earnest money deposit down.
  • Only 6% of buyers aren’t planning to use any of these tactics to cope with the increased difficulty of finding a new home.

Here’s an interesting one, not necessarily negative.

  • There are 8.3% more fixer-upper starter homes on the market than there were 6 years ago.

According to the list above, clearly many buyers are going into this season with action plans in hand - and you can too.

Get pre-approved before you shop.

You don’t want to fall for a home and then lose it in the rush to get approved for a mortgage. In addition, according to The Mortgage Reports.com, you can shop around for your mortgage the same way you shop for a home. Don’t be like other buyers and take the first offer you find.

Be prepared to act fast!

This means having all your ducks in a row and knowing exactly what you’re willing to settle for, and how much you have to spend. It is better to know when to walk away than get in over your head with a mortgage payment you can’t afford.

On the flip side, know what you can offer over and above what other buyers might be able to offer. If you have a bigger down payment or more earnest money, offer it up front.

You can also settle, up front, with your realtor what other terms you can add to your offer to make it more attractive. For example, offer a fast closing, a quick inspection or renting back to the seller are all things that don’t cost extra money but could make the difference to the seller.

Keep an open mind.

When looking at homes - especially the way we all window shop on our phones - it’s best to reserve judgment until you’ve seen a home in person. If there is a particular listing in your neighborhood and price range that you are tempted to pass by because the pictures don’t look great, think again.

Other buyers may be doing what you were tempted to do and miss out on a good opportunity. The same thing goes for viewing fixer-uppers. Not everyone can see past paint or finishings they don’t like. However, if you are willing to do that, you might just get in ahead of everyone else.

Takeaway

Yes, the market is crazy for buyers again this year. But take heart and keep informed. If you are interested in looking for a house, it is important to have an experienced real estate agent by your side. Call our office today!

248-348-7200