You have been saving for that down payment and now you are ready to start looking for that dream home! You access the internet and pull up sites like Zillow, Trulia, realtor.com, and other sites. You find a home you love and contact the agent only to be told the house is "pending" or "under contract". How did that happen so quickly you are wondering?? Welcome to what we call a "Seller's Market"
A Sellers Market is created when there is high demand for homes and low inventory of homes for sale. This is a trend that is happening nationwide. Housing supply has plummeted in the first quarter of 2017 according to a report from Trulia. The drop has significantly affected the starter home and trade-up home markets. This chart shows the path of starter, trade-up and premium homes since 2012:
Inventory is falling for many reasons. Trulia points out three of those in their report:
- Investors - Investors bought up many foreclosures units during the housing crisis and now use them as rental units.
- Price Spread - When prices of homes in different segments of the housing market diverge from each other, it makes it difficult for homeowners to trade-up to the next segment.
- Slow home value recovery - the slow recovery made it difficult for some homeowners to break even on their home and gain enough equity to sell.
Trulia also points out that increasing home prices bring a whole new problem. The report explained too little recovery might make it difficult for homeowners to sell their home but cheap to buy one, while too much recovery right make it easy for them to sell but difficult to buy.
In Yolo County, we are experiencing this phenomena as well. The first quarter of 2017 shows that homes for sale and homes sold are both down compared to the same quarter last year. Homes for sale are down 7.1%, sold homes are down 9.8%.
We have some suggestions to help you be better prepared to compete in this market:
- USE A REALTOR - Realtors are "tapped" into their markets. We know about new listings first cause we are the ones listing them! We are also frequently aware of of upcoming listings from fellow agents. A good realtor will contact you first about a new listing not waiting for you to find the listing yourself.
- BE PRE-APPROVED BY A LOCAL LENDER - Sellers want the assurance that you actually can afford to buy their home. One of our approved lenders is First Cal Mortgage. They have a "Gold Certified" program which enables you to be pre-approved thru underwriting before you put in an offer. This enables you to shorten the closing date to 14 days which allows you to compete with cash buyers. Contact us for more info!
- STAY POSITIVE AND BE FLEXIBLE! - Be as flexible in your schedule as you can to view homes. Remember the early bird catches the worm! Stay optimistic and positive, your home is out there!
Give us a call, email or text if you need a realtor or have any questions!
Victoria Walker, CNE - 530.219.SOLD - firstname.lastname@example.org - BRE#01033786
Julie Maguire, CNE, Certified "Green" Realtor - 707.217.9138 - email@example.com - BRE#01932418