Key insights
- Today’s buyers are reporting a longer-than-expected homebuying timeline due to low inventory and a crowded marketplace.
- By doing their research and being ready to bid quickly (and repeatedly), buyers can move toward the closing table in upcoming months.
- As interest rates are set to rise, spring buyers may want to purchase soon to take advantage of lower rates and increased buying power.
You’ve likely heard that the housing market is hot, hot, hot — but with low inventory in the low- and mid-tier market (under $500,000) dropping to even lower levels each month, we are actually seeing a decrease in the total number of home sales compared to last year.
Because entry level and move-up homes are harder to find than those priced above $500,000, spring or early summer buyers may find it advantageous to dive in now. Here are insights you can use to secure a new home in your preferred timeline.
The (new) three-month standard
A recent stat from the National Association of Home Builders says that the typical buyer is shopping for more than three months before finding the home that’s right for them.
While it may go against everything you hope for (and have seen on House Hunters), keep in mind that you may need more than a few weekends of open houses and home showings to find the house you’ll eventually purchase.
Be ready to bid
While it may take you awhile to find the perfect home, sellers in certain price points and locations are finding their houses are on the market for just days or weeks before they sell. The Minneapolis-St. Paul market is ranked tenth in terms of fast home sales; the median time on the market for our metro is down to just 47days.
That means buyers like you must be ready to move quickly and bid aggressively. As you tour homes, keep a running list of what you like and don’t like — and a list of “must-haves” vs. “nice-to-haves.”
Once you find a house that meets all your criteria, make a fast offer.
Then, be ready to bid again
Just a few years ago, sellers were excited if their home sold in multiple offers; now, they expect it to. More than one-quarter of today’s buyers say they have been outbid on a home, so try to temper your expectations as you make an initial offer.
You should also work with your REALTOR® to have a plan for how high you can go if you’re asked to make a counter offer. By having a plan in advance, you can lower your anxiety and proceed with confidence if a seller decides to entertain multiple offers.
Get in before rates rise any higher
After years of whispers about increasing interest rates, the new chair of the Federal Reserve has indicated that rates will increase gradually in 2018.
If you plan to buy in the next few months, keep in mind that even a small hike in interest rates can impact your buying power and cost you thousands of dollars more in the long run.
Ready for summer in your new house?
Whether you’re hoping to enjoy boat rides from your new lake home or iced tea on your deck overlooking the North Loop, you’ll want to be unpacked before the first few days of summer arrive.
That means you’ll have to get started on your buying journey now. Call, chat or email Edina Realty’s customer care team to be matched with a REALTOR® who specializes in your desired neighborhood.
For more tips on buying a home in Minnesota or western Wisconsin, follow #BuyerInsights on Facebook, Twitter, Instagram and YouTube.
