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I’ve been working with a young couple as a buyer’s agent, trying to help them find their perfect first home. They’re ready, willing and able to buy, and they’re realistic about their price range and what’s fair market value in that price range. They’ve been frustrated by sellers who refused to address items found in a home inspection, and sellers who felt their home was worth considerably more than what comparable homes had sold for.
This week the young couple sent me a list of 7 homes that they found on the internet, and wanted to see. When I looked in my electronic MLS (Multiple Listings Service), I discovered that 2 of the homes were already Under Contract. So I called the listing agents for the remaining 5 homes, trying to set up appointments to visit. To my surprise, 3 of the homes were in “Attorney Review” (this means the owners had accepted a buyer’s offer, and the lawyers for both parties were reviewing the contracts). FYI, most listing agents keep homes active in the MLS until after attorney review, so they can accept backup offers in case the lawyers can’t agree on the terms and conditions.
So out of the 7 homes they gave me, only 2 are still available! Out of 7 homes, it’s not unusual to find that a handful are no longer available, but 5 out of 7 gone is a new one for me. What does this say about the current real estate market? Looking closely at the 5 listings, I couldn’t find any rhyme or reason: some had been on the market for quite a while, others were fairly new listings; none of them were listed at prices significantly below fair market value.
To me, the most reasonable explanation comes from a variety of factors. The inventory (i.e., number of homes currently on the market) is very low. Pent-up buyer demand has convinced buyers that home prices probably will be heading higher, not lower. Mortgage rates are still incredibly low
If you’ve been sitting on the sidelines thinking that there’ll be a better time to buy or sell a home, you should reconsider the assumptions that you’re making. The real estate market is a LOT different than it was a year ago or just 6 months ago. Procrastination may not be a wise option at this point.