Fall-ing inventory could mean bidding wars continue this Autumn

 

The spring ‘pause’ in real estate activity has led to one of the busiest summers for residential real estate sales and the heightened activity appears to be spilling over into the fall months. 

Typically, in the Portland Metro area, the September through mid-November months tend to be the second busiest time for selling homes. With the pent-up demand for homes from buyers and continued low interest rates, this fall season could prove to be more active than usual.

Many buyers have found the increased flexibility in working from home allows them to move further from the city or work facility and are looking to move to the suburbs or find acreage property for more space and potentially lower housing costs.

We’re also seeing a bit of competition between the generations. Many boomers who are retiring are looking to downsize into single level/ranch homes. These homes are also being sought out by millennials who see this style and size of home as the perfect starter home.

Low interest rates, generally hovering at 3% or lower as we enter the month of September, are providing buyers with an increased ability to bid above a listing price or buy more home with just a modest increase in their monthly payment. The low interest rates are creating affordability most buyers didn’t have before.

However, sellers are content to stay put. It’s all contributing to competition for limited inventory.

So, how can buyers win in a seller’s market?

It starts with a competitive offer – which isn’t always a higher price.

If a home you viewed seems to be underpriced relative to other homes you have seen, bidding higher than what it is listed for may make sense. Sometimes, however, over-bidding on a property may not help in the long run. Should unfortunate events occur requiring you to move sooner than you anticipated, you may not be able to recoup those costs in a sale, and you may end up losing in the end.

Here are seven strategies to enhance your offer in lieu of, or in addition to, a higher sale price:

1. Shorten the inspection period from the typical 10 business days to 5 or 7. Ensure your inspector is available before writing that into the offer, because in hot markets inspectors are often scheduled out for a week or two. For the seller, this means their home is off the market for a shorter period of time if you choose not to move forward with the sale following the inspections.

2. Consider a ‘pre-inspection’ before writing an offer. We often don’t have this opportunity in the Portland area with homes coming on the market and offer deadlines set in 2-3 days. If the offer deadline is set for several days out, and the sellers agree to the inspection, you could then waive the inspection in the offer without taking the risk of having no inspection at all. This strategy may show sellers your level of commitment to the process. Keep in mind there is a risk of spending money on the inspection upfront and then not having your offer accepted.

3. Ask the seller what is important to them when considering offers, besides the price. They may need additional time of possession after the sale closes before they are able to move into their next home. They may benefit from a longer close date to allow them time to search for and obtain their next home. If you have flexibility in your schedule, work with the seller to ensure the time of closing and possession work well for both parties.

4. In a low inventory, hot market, it’s important for buyers to keep an open mind. A home might need a few upgrades to become the home of your dreams. Look at the house and understand what it has to offer. Not every house is going to be 100% of what you want. I generally suggest if a home offers 75%-80% of what you are looking for, you can typically make that house a home.

5. Offer for the seller to leave any personal items on the property that they no longer want or need, and you will address them upon possession. This offer term may need to be written on a bill of sale attached to the offer or written on an addendum indicating personal items remaining are of no value. Check with your lender to see what will work best with your financing.

6. If you are in a multiple offer situation and you submitted a purchase price higher than the list price, and if you have sufficient liquid funds available, consider offering to make up the difference between a low appraised value and the purchase price, up to a certain dollar amount. This will give the sellers a little ease of mind during the appraisal process.

If you are in the market to buy a home this fall, ensure you have an agent by your side that knows the business and the proper questions to ask. A good agent will research what offer terms will be attractive to sellers, will always be thinking of how to best represent you and help you to put your best offer forward, and will ensure you’re well-informed throughout the process.

Decor Hacks to Liven Up Any Space

August 2020 Real Estate Market Statistics

The following is the latest Real Estate Market Statistics for August 2020.

Click here for the full report

• Sales:   3,149 in August 2020 vs 2,901 last August:  8.5%
• compared to July 2020, closed sales are down 7.1%

• Pending Sales:   3,697 in August 2020 vs 2,929 last August:  26.2%
• compared to July 2020, pending sales are up 1.1%

• New Listings:   3,885 in August 2020 vs 3,757 last August:  3.4%
• compared to July 2020, new listings are down 8.3%

• Average Sales Price:   $481,000 in August 2020 vs $4558,900 last August:  4.8%

• Total Market Time: 41 days in August 2020 vs 48 days last August:  -14.1%

• Inventory in Months: 1.3 months in August 2020 vs 2.3 months last August

Inventory by Area:

• NW Washington County   1.25 months
• Beaverton/Aloha               0.74 months
• Hillsboro/Forest Grove     0.94 months

Just Listed! Kemmer Meadows in North Plains 2335 sf, 4 bedroom, 2 1/2 bath

 

Homebuyer Demand Is Far Above Last Year’s Pace

It's an active real estate market in the Portland Metro area!  Many newly listed homes are going pending within a week or so of going on the market.  Many homeowners, with list prices in all price ranges, are receiving multiple offers on their homes.  Buyer demand is strong in Portland communities, however, the inventory of available homes less than 2 months in many local areas.  Our activity is similar to what is happening nationally, and doesn't seem to be slowing down as we approach the end of 2020.

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Homebuying has been on the rise over the past few months, with record-breaking sales powering through the market in June and July. Buyers are actively purchasing homes, and the momentum is continuing into the fall. It is, however, becoming harder for buyers to find homes to purchase. If you’ve been thinking about selling your house, the coming weeks might just be the timing you’ve been waiting for.

According to the Pending Home Sales Report from the National Association of Realtors (NAR):

“Pending home sales in July achieved another month of positive contract activity, marking three consecutive months of growth.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 5.9% to 122.1 in July. Year-over-year, contract signings rose 15.5%. An index of 100 is equal to the level of contract activity in 2001.”

This means that for the past several months, buyers have signed an increasing number of contracts to purchase homes – well above where the market was at this time last year. Lawrence Yun, Chief Economist at NAR notes:

“We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market…Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings.”

Below is a graph that shows the impressive recovery of homes sales compared to previous years. The deep blue v marks the slowdown from this spring that turned into an exponential jump in sales that followed through the summer, skyrocketing above years past:                                                                            What Does This Mean for Sellers?

If you were thinking about putting your house on the market in the spring, but decided to wait due to the health crisis, it may be time to make your move. Buyers are in the market right now. With so few homes available to purchase, homeowners today are experiencing more bidding wars, creating an optimal time to sell.

Is This Trend Going to Continue?

As CNBC notes, there are no signs of slowing buyer demand this fall:

“The usual summer slowdown in the housing market is not happening this year. Buyers continue to show strong demand, spurred by the new stay-at-home world of the coronavirus and by record low mortgage rates.”

Danielle Hale, Chief Economist at realtor.com, concurred:

“In a typical year in the housing market, buyer interest begins to wane before seller interest causing the usual seasonal slowdown as we move into the fall. Due to a delayed spring season and low mortgage rates, we could see buyer interest extend longer than usual into the typically quieter fall. Whether this means more home sales will depend on whether sellers participate or decide to stay on the sidelines.”

As Hale mentioned, homeowners who are willing to sell their houses right now will play a big role in whether the trend continues. The market needs more homes to satisfy ongoing buyer demand. Maybe it’s time to leverage your equity and move up while eager home shoppers are ready to purchase a house just like yours.

Bottom Line

If your current home doesn’t meet your family’s changing needs, let’s connect to help you sell your house and make the move you’ve been waiting for all year.

Staging for Pumpkin-spice Season

 

Staging adds a fresh look to your home and helps buyers imagine living in the space. Here are four ways to stage for the fall season.

Up Your Curb Appeal - add colorful flower pots at the front door, rake the leaves, add a new, clean doormat, polish the door hardware.

Remove Signs of ‘Summer’ - It’s time to put away ‘summer’ items inside and out such as flags, beach items, deck umbrellas, etc.

Add Touches of Coziness - light your fireplace,  bring out cozy throws on sofas,  shift furniture to create ‘conversational’ groupings.

Bring In The Seasonal Décor - displays vases of fall flowers and foliage,  bring out the pumpkin scented candles, hang a fall themed haning on the front door.

The transition between seasons is important to reflect when preparing your home for sale. Buyers still in the market are hoping to find and move into their next home before the holidays or by the end of the year. Every effort made in getting your home sold, including staging, should emphasize looking ahead to the new season with positivity and confidence.  

Why Is It so Important to Be Pre-Approved in the Homebuying Process?

 

You may have heard that pre-approval is a great first step in the homebuying process. But why is it so important? When looking for a home, the temptation to fall in love with a house that’s outside your budget is very real. So, before you start shopping around, it’s helpful to know your price range, what you’re comfortable within a monthly mortgage payment, and ultimately how much money you can borrow for your loan. Pre-approval from a lender is the only way to do this.

According to a recent survey from realtor.com, many buyers are making the mistake of skipping the pre-approval step in the homebuying process:

“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.”

This paperwork (the pre-approval letter) shows sellers you’re a qualified buyer, something that can really help you stand out from the crowd in the current ultra-competitive market.

How competitive is today’s market? Extremely – especially among buyers.

With limited inventory, there are many more buyers than sellers right now, and that’s fueling the competition. According to the National Association of Realtors (NAR), homes are receiving an average of 2.9 offers for sellers to negotiate, so bidding wars are heating up.

Pre-approval shows homeowners you’re a serious buyer. It helps you stand out from the crowd if you get into a multiple-offer scenario, and these days, it’s likely. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war and land the home of your dreams.

Danielle Hale, Chief Economist for realtor.com notes:

“For a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”

In addition, today’s housing market is also changing from moment to moment. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals (a loan officer and a real estate agent) making sure you take the right steps along the way and can show your qualifications as a buyer at the time you find a home to purchase.

Bottom Line

In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. If you’re ready to buy this year, let’s connect before you start searching for a home.

September Home Maintenance Checklist