Don't Let Buyer Competition Keep You from Purchasing a Home
This year’s record-low mortgage rates influenced high demand among homebuyers. Current homeowners, however, haven’t put their houses on the market so quickly. This makes finding a home to buy today a little more challenging for potential buyers. With an obstacle like this, those searching for their dream homes may have entered delay mode on their searches as we come to the end of 2020, but that could be a big mistake for many hopeful house hunters. Let me explain.
According to the most recent Housing Trends Report from the National Association of Home Builders (NAHB):
“The length of time spent searching for a home continues to grow.”
The report indicates that 62% of buyers now spend 3 months or more looking for a home, an increase from 58% one year ago. A primary cause for the delay is the incredible competition that buyers are facing when making a home purchase offer. Based on recent data from the National Association of Realtors (NAR), the average house in our current market is seeing 3.4 offers prior to it being sold. This means for every buyer who purchases a home, there are on average two or three buyers who have to start from scratch on their home searching.
Compared to this time last year, the NAHB report shows buyers having a great deal of success locating homes in their price range. However, it also notes the percentage of buyers saying they’re getting outbid when they make an offer has jumped from 15% to 27%. Buyers note that bidding wars are an unwelcome road block in finding their dream home. This can be a bit of a challenge, and feeling stuck in the process is sometimes frustrating, but if there’s ever been a year to power through, 2021 is the one. NAHB noted:
“Difficulties finding a home to buy will likely lead 20% of active buyers to give up until next year or later. That share is up from 15% a year earlier.”
Experts anticipate that as we go into 2021, we will proceed with increasing home prices, along with the incredibly low interest rates we’ve been fortunate to have over the past year. Hopeful homebuyers who decide to pause their search until competition decreases, run the risk of finding a more expensive housing market once they restart their search. If affordability is a key motivator behind your decision to buy a home, this winter is still the recommended time to do it!
One More Thought
Bidding wars may be one of the greatest challenges buyers face in today’s housing market, but they shouldn’t be a deal-breaker. Having the right expert working for you throughout the buying process will give you some crucial home buying advantages, including that all important edge to make a competitive offer. If you’re ready to buy this winter, contact a local real estate professional to discuss how to position yourself for success.
~Real Advantage Partners team