Tuesday, July 27, 2021 / by Christine Elwood
The real estate market across the country has seen tremendous movement throughout the pandemic making it difficult for buyers to find their next dream home. While it may be more challenging than a year or two ago, finding your next home is still possible! Below we break down the complexities of today's market and what you can do to prepare!
Understanding Goals & Market Conditions
People often ask us about the first step in the home buying process. No matter what the market looks like, we recommend hiring a realtor you trust and working with them to understand your motivations and establishing clear goals. Market conditions heavily impact the decision-making process, so having your goals clear will help you and your realtor navigate the market. As part of your discovery process, you may realize the current market is not for you, and that's okay! We want you to be comfortable and happy with your purchase, so we have outlined some of the market challenges you will need to consider.
Currently, the Vermont real estate market is experiencing a housing shortage. The number of buyers actively looking to purchase a home in VT greatly outweighs the available inventory making for a more competitive landscape. With these conditions, you may find fewer options that meet your criteria, and you may need to adjust your search to find the best fit for you. Some homes on the market are also selling through what is known as a “pocket listing”. These homes never hit the public market however, your realtor will help you access these listings if they fit your criteria!
With the existing shortage of homes, we have also seen the pace of the market pick up tremendously. With so many buyers looking, we are seeing many homes selling in a matter of days versus the traditional weeks or months. Some buyers are even waiving steps like inspections to close the deals faster. With this said, you may need to make quick decisions to secure the home you choose and if you are not ready to do so, the seller may pick another buyer that is.
Another big shift in the market is the price that homes are selling for. The competition for homes has driven prices up meaning some properties are selling well over the original asking price. You may find that a home that was $300,000 in 2019 is now receiving bids for $340,000. To beat your competition may need to put in a bid over the asking price and have a price escalation clause in case another bidder is higher than your initial bid. Your realtor will help you understand the market pricing to make sure you are still getting a good value on the home you purchase.
If you are comfortable with diving into the market, you will want to make sure you are pre-approved by a lender. Pre-approval is a major step in the home buying process as it will guide you towards what types of homes you are eligible for. In addition, from the home seller’s perspective, pre-approval lets them know you are a ready and buyer and puts you on the same playing field as cash buyers.
We know this can be a stressful market to participate in and that is where we can help. We work in this market each and every day and have systems to give you real-time information for your home search. Should you have questions or need guidance along the way, we are always there for you and ready to help you achieve your goals. If you would like help buying your next home contact us at firstname.lastname@example.org!