Working with buyers lately I have been reminded more and more of the early 2000's…when you diligently watched the market and ran to be the first to find a good new listing before it sold…and hopefully avoid a bidding war.
The current reality is that due to increased sales and fewer new listings, the months supply of homes for sale is down in all price ranges under $500,000 and most notably in price ranges under $200,000.
A market balanced between buyer and seller is considered to be a five-month supply of homes based on the current rate of sales. With a 4.6-month supply of homes reported in the under $120K price range in April and sales continuing to increase, it truly is a seller's market in this price range. That's quite a change from last year at this time, when there was nearly a 10-month supply of homes for sale in the same price range!
I haven't kept track of the exact numbers, but I would say more than three-fourths of all offers I make in the lower price ranges involve multiple offers. It usually takes losing a property or two for buyers to realize that often in multiple offers, even in this market, full price or more is frequently what it takes to have the winning bid. Although there aren't as many multiple offers in the mid ranges, they are also becoming more common as that supply also drops.
If first-time homebuyers will indeed be able to use the $8,000 tax credit for a down payment, it could make the competition even more intense as more people have the funds to buy…and could possibly also extend up to homes in the next price ranges.
What is different from the market of the early 2000's, however, is that buyers aren't ready to snatch up anything they can find. They are more conscious of price, condition and how a property shows. Coming out of such a strong buyer's market, buyers want sellers to 'WOW' them before making a decision to buy. They want BOTH better price AND better condition than the competition…and it had better look good online, because that is how buyers are selecting the homes they are interested in seeing!
Sharlene Hensrud, RE/MAX Results – Email - First-Time Homebuyer Realtor
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