We thought that 2015 was a stellar year. Yet, 2016 is shaping up to beat those statistics as a Seller’s Market continues to flourish for the homes for sale in Alamo Heights.
First of all, let’s define a Seller’s Market. “In a seller’s market, there are fewer homes for sale to a larger pool of buyers. The factors at work could be sustained low interest rates, high employment rate, legislative changes which make it easier to purchase a property – events and conditions that make buyers think it would be a good time to buy a big ticket item like a home. The advantage goes to the seller in a seller’s market – typically home prices will rise as buyers are quick to make an offer to secure the property; sometimes buyers will compete for a property, driving the price above expectations.”
A Seller’s Market is great when you are a Seller. However, it can make the homebuyers search incredibly stressful and frustrating. Here in San Antonio and the surrounding contiguous counties, we are seeing insane prices, bidding wars, low inventory. What is a savvy, informed homebuyer to do? Do some research and seek out a trusted and EXPERIENCED real estate agent to help guide you through the rapids. Hopefully, you can find one with fairy godparent-like skills.
Below are 5 reasons why homebuyers are stressed out and what to do about it. Become educated about the process and become savvy.
- Pricing. Even though we are experiencing a historic all time low on interest rates, home prices continue to rise. Entry-level homebuyers are in a world of hurt as more millennials move into the marketplace. In San Antonio, many first time homebuyers are finding that they will need to move beyond their desired location in order to have the amenities they are looking for. This can result in longer commute times. They have been priced out of the market for easy commute times.
- Low inventory. The inventory for homes for sale in San Antonio is at a historic low. Job growth remains strong and, so far, the dip in the Eagle Ford Shale activity has not rippled to the San Antonio market. Foreclosures have been steadily decreasing. This creates a high demand for homes with too few homes coming on the market. Competition for homes up to $300,000 is fierce with many homes having multiple offers submitted.
- Bidding wars. Ugggh. Even real estate agents don’t really enjoy them. Bidding wars are more common than normal in a Seller’s Market. When inventory is low, bidding wars can begin with fervor, oftentimes with offers being made the first hour the house hits the market. It is common to see homebuyers willing to overspend. This can be risky as the home may not appraise out. Many first time homebuyers may not fully understand the risks involved as they get into fever pitch to have their offer accepted. If they are working with a seasoned real estate agent, the agent will help guide them through this arduous, nail biting situation. Low inventory + low mortgage rates + out-of-control bidding wars ===== even higher prices. Add on some more stress. Wowza!
- Cash buyers. Say whaaaa? “Where do these guys come from…. They are so lucky” is what I hear frequently from Buyers who are focused on undervalued homes, short sale homes, handyman special, homes needing TLC. Although frustrating to the Buyers agent…. Both the buyer’s agent and seller’s agent generally expect the competition will include an investor. In order to win against this type of Buyer, the homebuyers will need to have a strong pre-approval letter to submit with their offer. Most Sellers don’t necessarily want their property to go to the investor. They want it to go to a family. Often times, the homebuyers have not sufficiently prepared for this scenario and come too late in the game. If you are in the market for this type of property, you are advised to have completed all of the needed homework and be sitting on the ready button. The success in winning a bid against a cash offer is often times related to how experienced your real estate agent is with this type of transaction.
- Outsmarting the competition. If this is truly your dream house….. I mean, you will die a slow, tortuous death if you don’t get this house, there are ways to have the Seller look more favorably at your offer. Homebuyers who have done their homework, have been pre-approved, are flexible and don’t have to move right away are the homebuyers who are the ones who walk away with the prize. Often times, it is not the highest price, but the best terms which sell the deal. Are you willing to put higher amount in Earnest Money? Pay for the Title Policy? Move out of option period quickly? There are some homebuyers who are even willing to forego an inspection. GASP. Don’t do it! Leave that to investor buyers. Cuz, only crazy homebuyers don’t get an inspection. Just sayin’.
With interest rates at an all-time low, check out the Alamo Heights homes for sale. Feel free to call me and pick my brain. I enjoy talking about this stuff.
Be savvy, not crazy! Peace out.