There has been a lot of speculation lately, especially among buyers; as to why housing quantity is so low. I have been predominately a buyer's agent for my nearly 22 year career in real estate; so, the onslaught of questions regarding this drought ridden property supply is excessive and continual.
Initially, I can't say I knew the reason; and, excused it as ebb and flow of real estate. Yet, as time has lapsed, and the home accumulation has not grown; I felt it time to investigate.
What I came up with was quite interesting; and, helpful as it relates to my clients moving forward in locating homes to purchase.
A little spy work can uncover conclusions
1. After the bubble burst throughout most of the nation, in the mid 2000's; investors and contractors began gluttonously gobbling up property between 2011 - 2013. Prices were incredibly low, as there was stockpiles of foreclosed homes, still just sitting. These properties could be bought for pennies on the dollar, and were! In some cases, anywhere from 5 to 20 properties were scooped up by LLCs in a single month. So, yay...great for them. And, boo...bad for everyone else that wanted an opportunity to buy a home. Well-off business people pushed many first-time buyers right out of the market, with slam dunk cash offers. Nothing secures a contract better than cash and a quick close (except maybe the word "as is") in the purchase agreement.
2. Interest rates dropped to historical lows during this time, as well. In 2012, mortgage rates dipped into the low 2%. Many folks that were fortunate enough not to have lost their homes in the recession, refinanced; and, some miraculously found, not yet spoken for properties to purchase, at rock bottom rates. So how does this effect today's market? With significantly low house payments, many have no interest in selling, now; or, any time in the near future.
3. More millennial buyers. That age group, between 24 - 35 are now ready to buy! Plainly stated; with more buyers out there scrounging for scraps, what is left are crumbs...molecule, at best.
Well, there is it is; a few solid reasons that we are experiencing the ghost town sound of gently rolling tumbleweed blow through this market. Will it recover you ask? As many of us say, in sales, of any kind...if I knew the answer to that, I'd be a millionaire. However, statistically real estate is an ever moving market. It never stays still. So...yes; it will recover, and then decline...wash, rinse, repeat.
Top Secret tips save the day
Well, I promised some secrets; and being honest, I can't say these are tips that have been buried away in some bound treasure chest, on a deserted island. But, currently, they will help in this Sahara dry industry.
1. Get a good (I mean very good Realtor). In this market, you will want to find an agent that works with buyers, almost exclusively. Most salespeople know how to work with both buyers and sellers; but, each have their preferences and strengths. Therefore, in a crawling commerce; a buyer's agent, is best. The reason for this specific relationship is...skill. A buyer's agent knows to research often, move fast and negotiate strong. If you trust your Realtor; now, more than ever, you will need to trust their advice. This will be the difference between wining the bid in this multiple offer arena. All you have to do is lose the proposal once; to know you don't want to go through that, again.
2. Make Craigslist your new BFF. Along with CL, start hanging out on the weekends with FSBOs (For Sale By Owners). Disclaimer: be sure you still have your Realtor intact; the only thing worse than losing various offers; is losing the house you love, because you attempted to do it without a professional. Remember, you do NOT pay the Realtor, as a buyer. So, please don't let the FSBO's convenience you, that you will get a better deal if you cut out the agent. This is a lie. You may save "some" money if all goes without a hitch; but, then again...you may lose the home, time and a whole bunch of court fees, when the deal goes south. Not trying to be nasty; but, let the seller deal with how to come up with their commission.
3. Again, as mentioned in the scenario #1; the experience of a good and hard-working agent is crucial. Request your Realtor visit your local county assessor's website; and take an inventory of names and contact information of neighborhood homeowners. Then ask your agent, to kindly reach out to these sellers; seeing if they may be interested in selling their home. It's never good to assume, that just because a home is not on the market, that the occupant inside, isn't considering selling it. Perhaps, if a professional with a solid buyer, knocked on their door (so to speak) with this information...they might just sell! It's happened; more than once.
Clearly, in this parched real estate bazaar; a good (no, great) real estate salesperson is your best bet! An expedient and adept Realtor; will become your..."secret" agent; able to turn into Super Sleuth and discover your clandestine dream home.
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