The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:
“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”
The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:George Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:
“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”
The question is: What does this mean to you?
If You’re a Buyer…
Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.
If You’re a Seller…
Realize that, in some ways, you’re in the driver’s seat. When there’s a shortage of an item alongside a strong demand, the seller of that item is in a favorable position to negotiate. Whether it’s price, moving date, or necessary repairs—like plumbing, roof repair, boiler repair issues—you can request that potential buyers address these concerns. Additionally, having access to quick and efficient emergency plumbing help can be a major advantage, ensuring any plumbing issues are promptly resolved. This responsiveness can further increase buyer interest, especially when multiple parties are competing for the property.
Don’t be unreasonable, but understand you probably have the upper hand. Before you sell your house, gather more information and be sure that every home’s system is already in good shape. For example, if you still have plumbing issues, hiring a plumber is your best option.
Bottom Line
The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.
Leave a Reply