Updated: Feb 8
2020 was a wild year and as such, there were a lot of changes happening in our industry. COVID-19 has shaken up our industry, the economy and our well-being.
I want to prepare you for what to expect in 2021.
1. Low inventory, high demand and multiple offers
So what's new, you ask? For now, it seems we will remain in a seller's market, especially in the 'burbs.' People are still seeking more space, to live, exercise, enjoy nature and focus on wellness.
Buyers must have all their financial ducks in a row. (see my past blog posts) and be ready to pounce when that 'right home' hits the market.
Buyers coming from out of area need to get okay with virtual tours and possibly making an offer sight unseen. Waiting for the perfect home? If you pass now, it may continue to increase in value and look like a bargain in 3,6, 9 months from now. And, we all know, there is no such thing as a 'perfect home.' So, being picky can cost you money and disappointment.
Bidding wars will be around for awhile longer. Be prepared. There are ways to write a competitive offer, using terms and conditions that can put your offer at the top of the heap. Buyers, you must pay attention to list vs. sold prices to best understand how to position yourselves to win. You may need to readjust your price range downwards to have the flexibility to offer an asking price when that right one comes along.
2. The market will not pay top dollar for overpriced or out dated homes.
Buyers and their agent's know what homes are selling for in our area and their condition. Tale a computer: you go to store A and see a computer with all the bells and whistles included in the price. You are looking for the best value and visit store B where you see the same model computer yet it doesn't come with any of the features and benefits of the computer at store A. What you expect Store B's computer to be priced for? Lower than Store A's of course. Buyer want more features and benefits for the best value, and it's all about price.
See homes that have been sitting on the market for weeks and weeks, maybe even months? It's sending out a signal that something is wrong. It is either price, condition or something about the home that is really odd and can't be fixed. Sellers, will want to get real about what it will take to get a less than perfect, move-in ready home sold.
3. Transactions will be faster than a year ago after the pandemic hit.
The days of showing home after home have dwindled for now due to low inventory. COVID-19 created a climate of serious buyers, as opposed to 'looky-loo's' and nosy neighbors.
4. Lease back after selling
Buyer's agents need to ask what is important to the seller. If a rent back is imperative, then the fact you can offer that could give you an advantage. Many sellers are trying to sell and also buy their next home while moving one time and not moving to a rental and putting their things into storage. some sellers may be building a home, yet most of our sellers are actually offering the same courtesy to their sellers they are purchasing their next home. It's a chain of events that needs to be choreographed so all parties get what they want/need.
5. Appraisals may become a challenge
Dues to the increase in home values and offers coming in well above asking price, Appraisals are interesting: you can get 3 appraisals from 3 different appraisers and receive 3 different values. It's one person's opinion, not necessarily market value and maybe not the price the seller and buyer will eventually agree upon. Some buyers waive this, others will come up X between any deficiency between asking and offer price.
6. Overvalued area?
Prices have been so high for so long some buyers are throwing in the towel and determining that moving out of area ot state makes most sense. They can get more house in a more affordable area where cost of living is better. After all, some of the major tech companies in the bay area have told employees they can work form home...indefinitely. Traffic, bidding wars, high prices, schools. Many are looking to build equity and have a slower paced life elsewhere. The red-hot market cannot be sustained forever.