Should you Buy? Sell? Here are the Changes Tara Kelly has Seen in the Real Estate Market
The last couple of years have seen some big changes in the real estate market; Covid, low inventory, and rising interest rates are just a few of the things buyers and sellers are dealing with. We're checking in with realtor Tara Kelly on what we should know about changes, buying for the first time, and decisions about downsizing.
What changes have you seen in the local real estate market over the last year?
Covid showed us how adaptable the real estate industry is. For example, 2020 started off well. Traditionally, the spring real estate market begins to get busy for us in February. By March, inventory is increasing and we will continue to be busy through the summer. Towards the end of July, we usually see the market slow down a little. Inventory might sit a couple of weeks longer.
However, in March of 2020, Covid brought our real estate market to a temporary halt for a couple of weeks. But, because the industry has learned to adapt, Buyers and Sellers began to make adjustments and we were listing and selling homes again quickly. It was exciting to be a part of the dynamic market. Face masks, hand sanitizer, shoe covers, and limitations on how many people could preview a home at one time became the norm. As the market began to bounce back, we saw a huge increase in demand for houses and supply could not keep up with demand. For example, typically our area would have about 7-15 single family homes available for sale. In March-June, that got as low as 1 available single family home a couple of times...with the shortage, sellers are able to capitalize on the decreased competition.
Now, in July we are back up to 10 single family homes available for sale. We continue to see multiple offers on homes that are well priced, updated and when they are in move-in condition. With more people being able to continue working remotely, we have seen an increase in buyers who are new to the area. After speaking with the Buyer Agents, it seems that buyers have increased flexibility regarding where they live since they are removing or lessening how often they commute to work.
What should buyers keep in mind about the current market? How about sellers?
The current market is competitive, I would encourage both buyers and sellers to do their research prior to beginning to look or listing their home for sale. Affiliate with an accomplished Realtor in your area. Your Realtor will give you timely advice about the current market and advice on how to be a competitive buyer or seller.
For buyers, get pre-approved with a lender before you begin looking at houses. The market is too fast paced to look at houses, find one you love and then start the loan process. With many homes selling within a few days, a strong buyer will submit a competitive offer with the lender letter attached. Ask your Realtor for suggestions on how to make your offer more attractive, what is important to the Seller? Maybe a free rent-back so the Seller can transition to their new home. Or, does the Seller prefer an as-is sale? Your Realtor will explain different options to structure your offer so it stands out to the seller.
For sellers, inventory is limited so the lack of options should drive buyers to your home. This usually works out well for sellers. Affiliate with a strong Listing Agent who works in your area. The Listing Agent will advise you on the current market and suggest a list price, and tell you how long she/he expects your home to be on the market. Because the market is fast paced right now and buyers are often having to write an offer after seeing the house just once, some sellers are doing a pre listing home inspection. The Seller pays for this inspection and can then share the report with prospective buyers. The report might give confidence to buyers to make an as-is offer. Let the Buyer Agents know what terms are most desirable to you (ie, a 30 day settlement with a one week rent-back).
How have current interest rates affected the local market?
Current interest rates have supported the strong local market. Rates continue to be low, allowing buyers to qualify for a home that meets their wants and needs.
What advice do you have for buyers looking to get into the market for the first time?
Be patient...and good luck! It is a competitive market and we are usually seeing multiple offers on homes that are well priced and in good condition. As a buyer, it is important to be prequalified with a reputable lender prior to submitting an offer. Have funds set aside for an earnest money deposit and closing costs. Affiliate with a strong Buyer’s Agent. Your Realtor will be working with you to find your home of choice and then to have your offer accepted. Ask your Realtor for ways to make your offer stand out to the seller. Maybe an escalation clause, or an as-is sale? A free rent-back for the seller?
In this market, you might write multiple offers prior to having your offer accepted.
How about people who are looking to downsize as part of their retirement plan? Any advice?
Now is a great time to sell! When demand exceeds supply, sellers generally sell for a higher sales price. If you are moving to a less competitive sellers market, then you should do well on the buying side. If you are selling your larger home & purchasing a smaller home in the same community, you will benefit from a higher sales price on the sale of your home. When you buy, choose a home that has a desirable location and updated features. One of our favorite expressions is ‘The day you buy is the day you sell.’
What are a few things buyers are looking for in a new home? Has that changed since the pandemic?
Price, location and condition tend to be the major things buyers focus on when buying. Updated kitchens, bathrooms and windows are important to many buyers. Additionally, the age of the roof, HVAC system and appliances are important to buyers so that they can budget for necessary repairs/updates along the way. Since the pandemic, we are seeing a greater emphasis on the possibility to have one or more home offices. Pools and home gyms have gotten popular on buyer wish lists. Between teleworking and virtual learning, home owners need their homes to be multipurpose.
About Tara Kelly
Tara Surlis Kelly has been a Realtor since 1999, when she joined her family business, Team Surlis with RE/MAX Leading Edge. Tara loves the excitement of helping clients find and purchase their home of choice and assisting sellers as they transition to a new home. Real estate is a dynamic industry and Tara enjoys the pace of the job. Tara has served on the Board of Directors for the Masters Club and as the Vice President. Tara can be reached at 443-995-8354 (cell), or firstname.lastname@example.org, www.teamsurlis.com. 410-721-9616 RE/MAX direct number. Tara Surlis Kelly is not affiliated with Lincoln Financial Securities Corporation.