Tuesday, February 9, 2021 - by Robert Backer, president, Greater Chattanooga Realtors
Housing inventory remains low, and likely this spring will be another fiercely competitive one across the country. With this in mind, realtors and potential buyers should prepare for record low inventories and rapidly rising home prices.
How did we get to this point? Danielle Hale, Realtor.com’s chief economist, painted this national picture stating, “Demand for housing was already strong coming into the year and we don’t see that slowing down with millennials reaching prime homebuying age, and many remote workers still in the market for more space. At the same time, sellers failed to materialize in January, which has pushed the number of homes for sale to new lows and suggests that our new normal of rising prices and brisk sales is here to stay at least through the first half of the year. Those thinking of getting into the market this spring should brace themselves for a competitive season, especially in the market for existing homes.”
In other words, we’re about to begin what is typically the busiest part of the homebuying season, and the options are and will continue to be very limited. The number of homes for sale nationwide in January plunged 42.6 percent year-over-year, which is a new low, according to records dating back to 2020. These conditions have led to increased prices across the board.
If January is in any indication of how the spring market will play out, buyers need to be ready to act quickly. As I mentioned a few weeks ago, every step of the process counts. Hiccups can cause valuable time, and it’s crucial to have a realtor’s guidance, especially when you may be competing against other buyers. It’s critical for buyers to have financing in place, as not doing so could make another offer more compelling to the seller. Talk with your realtor and lender about the important distinction between pre-qualified and pre-approved. When reviewing multiple offers, a seller wants to know whether a lender has deemed the buyer eligible for a specific loan amount. Not only does pre-approval send the right message to a seller, but it also gives the buyer an appropriate price range in which they should be looking.
Coordinating showings with a buyer’s traditional work schedule can be tricky, not to mention many sellers still working from home. Many listings in our market are seeing 20-plus showings on the first day on the market. Talk with your realtor about a one-on-one virtual showing so you can view the property as quickly as possible. Not only does this eliminate your drive time or stepping away during work hours, but also you can view a property and ask questions.
In a low inventory environment with multiple offers and frayed nerves, having a professional in your corner can make the difference in getting the home you want. Realtors work to make homeownership a reality for everyone in our community. That’s Who We R.