Lots of buyers not enough houses
What’s happening in the housing market? I have been hearing this question often during this time of Covid.
Before the pandemic hit, the housing market had just gone through its slowest inventory time of the year—from Thanksgiving until mid-February — when it’s typical not to have many homes on the market and not many buyers actively looking. After the pandemic hit starting in mid-March, that low inventory not only continued, but got even lower.
In fact, according to a Clever Real Estate survey, 91 percent of owners in April paused, canceled, or adjusted their selling plans due to coronavirus. This has loosened up a little but the market is not where is usually is this time of year.
No need to despair, there are signs of hope and I am seeing gradual movement — I continue to work hard to find win-win situations to match potential buyers and sellers, and showing you can move forward with your real estate plans in a safe and secure manner whether you’re a buyer or seller.
Since real estate is considered an essential business, buying and selling has continued as long as everyone adheres to CDC and social distancing guidelines. The total number of sales has declined year over year but if you are a seller know there are plenty of people looking to make a move and if you are a buyer and willing to be patient the right house will be there.
Here’s a great overview of what’s been happening when it comes to inventory, what we all can do about it to make the situation better, and how you can find a way to move forward in the weeks and months ahead.
Life Plans Put On Hold
This prolonged time of low inventory can feel excruciating for buyers who have dreamed of owning a home for years.
They may have tirelessly saved for their down payment, worked on their credit, and are more ready than they’ve ever been to make their homeownership dreams a reality. But they only find week after week very few homes to see.
The low inventory is also impacting sellers. With no homes on the market, there is nowhere to go when they’ve waited years to move up to that larger home or downsize to something more manageable.
For some the uncertainty about whether or not the kids will go back to school in the fall is another added stressor. Will they be in the right school district, is there enough room if we all have to continue to work and learn from home? I keep hearing from clients about how disappointed they are with not being able to move forward with their life plans because there are hardly any homes on the market. This is compounded by the fact that everyone is home almost all the time now, shining an even brighter light on what it means to have just the right place to call home.
Hesitant Sellers In All Price Points
First and foremost, I want buyers to know this is temporary. It doesn’t have anything to do with your criteria or being able to “fix” the problem by increasing your budget.
The lack of inventory is the same across all price points, and as I often say, money doesn’t always solve a criteria issue anyway.
There are many reasons sellers paused their plans to put their home on the market:
Job uncertainty
Not wanting people in their home during a pandemic
Unease about the economic impact about the pandemic
Feeling like it’s not a good time because of buyer demand
All very understandable reasons to push the pause button on a home sale.
Buyer Demand Remains Strong
Buyer demand seems to have remained high in the DMV area, despite some buyers halting their searches initially due to the same reasons as sellers.
Many buyers have come to the conclusion that it can be a good time to move forward despite the competition. Some buyers need to move for a variety of reasons. Some have decided the home they’re in doesn’t fit their new lifestyle-they need more room, a yard or a home office. In addition there are potential buyers who need to move for a vast array of life changes, from relocating, getting married, having babies, or they recently sold a home themselves.
What Can Buyers and Sellers Can Do Now
To better deal with the current demand and lack of supply, there are things that sellers and buyers can do to make the situation better for them.
For buyers — Be very clear about what you are looking for in a home. Having more clarity can help me look for off-market homes for you. Yes, homes that aren’t officially listed.
Understand that this isn’t your usual market. Your plans will still come to fruition; they just may be delayed by a few weeks or months, but not forever.
For sellers — Realize that even with this uncertainty there are buyers who want, or need to move. They have more time to be looking on-line and dream about their perfect home. There may not be as many lookers as there have been in years past, but the people who are looking are serious. Being willing to stay open to new strategies if you need or want to sell your home, will make this so much more manageable. Working together we can come up with a plan that matches the right buyers for your home.
Know that prices are going to remain strong amid COVID-19 and afterward since inventory is limited and there is a growing housing demand from buyers. That’s good news for sellers as this pressure keeps prices strong. Homes that are priced competitively are seeing multiple offers. Prices aren’t necessarily higher but buyers are open to compromises they may not have been willing to make in the recent past.
Determining what is comfortable for you and your family when it comes to listing your home, and working closely with me to ensure a safe and secure environment. Your health and safety are my top priority, and I have shifted how I show homes using more technology.
How I’m Being Proactive for both Buyers and Sellers
In addition to keeping my hawk-eyes on the inventory for homes that fit my clients’ criteria, I also have several off-market initiatives that I am using in an effort to be proactive about finding my clients homes, or matching potential sellers with buyers.
1.) Off-market forums and groups. I am posting my buyer needs and information about our upcoming listings, working with other top agents in the area who may have listings that are not on the market yet.
2.) Reaching out to homeowners. I am working with clients who have expressed interest in selling and are prepping their homes for sale. Keeping their plans to sell moving forward, while adhering to social distancing, can help bring more homes to the market. I am keeping those properties in mind when meeting with new buyers to see if there might be a good fit.
3.) Request for properties. I am reaching out to everyone I know—agents, clients, friends, family — looking high and low for properties that match my buyers’ criteria. I am also spreading the word when I hear about potential sellers who aren’t interested in having many people coming through their homes. Perhaps with just one showing they could sell their home to one of my buyers, creating a win-win situation for both parties.
4.) Being proactive vs. waiting around. I have always taken a proactive stance when looking for homes for my clients. But now more than ever, I am being proactive, calling agents who specialize in certain areas or price points, calling past clients, posting on community boards and writing letters looking for anyone who might have a home that fits my clients’ needs.
Inventory Ticking Up
It seems like many potential buyers and sellers are coming to the conclusion that social distancing will continue for months and they are comfortable about their decision to move forward with their plans in a safe and secure manner.
I am seeing this movement. Although new listings are down about 30 percent year-over-year, they’ve been gradually rising for the past two months.
Pent Up Supply and Demand
There’s good news for buyers who have been waiting on the sidelines. A recent study found that sellers are prepping their homes and getting ready to list. They realize this may be just the right time to make their move.
A study by Johns Burns Real Estate Consulting found that new-home transactions have doubled in recent weeks as buyers in the 31 to 40 years old are interested in becoming homeowners.
According to the study, this group wants to get out of its dense apartment-style living situations and is comfortable using technology and virtual viewings to buy their first home. In addition demand is growing from young families who have felt the constraints of living in tight space conditions during COVID-19. They are looking to move-up or upgrade to a larger home with more room and amenities to better fit their needs.
Staying Healthy Remains Our Top Priority
For buyers — know I am doing everything I can to look for off-market opportunities while I wait for the inventory to come back, which it eventually will.
For sellers — know it’s a great time to sell and prices remain strong if you are comfortable moving forward with your plans now or later on.
Even though real estate and all related services have been deemed an essential business by both federal and local governments, I want to work within the comfort level of each one of my clients.
I will continue to adhere to social distancing practices and my safety policies and procedures with every client. My number one priority is to continue to help our clients meet their real estate needs while keeping everyone safe.
As always, I am here for you with all things real estate, don’t hesitate to reach out. I am also grateful for your referrals and will do whatever I can to help your friends. Enjoy the rest of your week!