3 Ways Housing Inventory Affects Your New Home Plans This Summer
With the concerns of a housing crisis well into the rearview mirror, both home buyers and sellers alike can rest assured of a continuing strengthening in the market during 2019. However, there is one small factor that is impacting people’s ability to sell or buy a home: inventory.
Anyone who ever took Economics 101 – or shopped for that “must have” toy during the holidays – understands that demand and supply are tightly aligned to ensure for healthy markets. As we move into the summer of 2019, supply for homes for sale remains lower than experts would like.
What is being found is that lower-end homes are flagging for inventory numbers, and upper-tier homes are seeing prices that need to adjust to make up for the lack of properties for sale.
Jessica Lautz, Vice President of NAR has stated: “There’s a supply-demand mismatch… More inventory is needed at the lower end and a price reduction may be needed at the upper end.”
So, with less houses available for sale, how does this affect home sellers and buyers heading into the busy summer months?
1. Affects on Home Buyers
If you are looking to buy a home this summer, chances are the options will be less than they have been in the past, meaning less houses for sale in your target areas. With that in mind, you need to understand that competition for those homes will be higher, so its important that you ensure the best chance of success by doing what you can on your end to make your offer the best choice for the seller. A few things to check:
• Credit and finances – be sure your credit score is in the best range possible and that your debt-credit ratio is good.
• Offer is reasonable – don’t try to offer too little right now – with the lower inventory and higher competition, sellers don’t have to entertain unrealistic offers.
• You’re able to move in an appropriate time – chances are, the person selling the home you’re buying is moving/buying somewhere else. Be sure you enter the process ready to move out of your own space.
2. Affects on Home Sellers
Home sellers always know that they have to ready their property before listing it for sale, but with lower competition in the housing space, it can seem it would be easier to sell a home with less effort. The fact is, buyers are not committed to buying at all – many first-time buyers have specific neighborhoods in mind once they begin searching for a home, meaning busy open houses for those homes that are in those areas. Those home visits cane become competitive, if the space is worth it.
So, what does that mean? Don’t get comfortable with the decreased home competition – you could lose offer options that way. Update the kitchens and bathrooms, paint your walls if they need it and spruce up the yard. Each of these areas is a focal point for those considering your home – invest some dollars to get the best offer possible.
3. Affects On Home Buyers and Sellers Alike
Decreased housing inventory will affect demand, as well as selling and buying processes this year. Home owners looking to sell will have to price their home’s right to get the offers they need and home buyers will need to ensure their offer stands out. Home sellers need to invest into their space to raise offer rates with the highly competitive buyer market, and home buyers need to be specific about what they want in their new home to give the home seller the peace of mind that they’ll follow the process through to the end.
Both homer buyers and sellers alike will benefit from connecting with a skilled, local real estate and mortgage professional to navigate this lower-supply, higher-demand summer.