The COVID-19 pandemic definitely made waves in the housing market, causing available inventory to plummet for home buyers. Employees and students were sent home to conduct their work due to social distancing. Lifestyles were shifted, which in turn altered the mindsets of homeowners and renters. Rather than put money toward a new home, they used stimulus checks and extra income to renovate their current home.
In addition, the pandemic led to a shortage of workers and building supplies. And as a result, when home buyers were ready to buy, new homes were not being built at the pace the market demanded. Therefore, housing inventory hit a record low.
What does this mean for buyers?
A positive outcome of this predicament is very low interest rates for mortgages. However, a lack of available options causes affordable houses to be quickly taken off the market. Potential home buyers must bid against one another to offer the best price for the seller. This places the power into the seller’s hands since they set the terms and choose the new owner. For example, if a hopeful couple is about to put in an offer for a home, another buyer could make an all-cash offer to win the final bid. This can happen quickly, so it can become frustrating when you are ready to move into a new place and have to wait longer than anticipated.
How can buyers navigate this low inventory?
Work with a mortgage lender to get pre-approved before shopping for a new home. This will give you an advantage over other buyers since you appear serious about making an offer. It is also important to shop on the lower end of your budget. Due to low inventory, houses tend to sell over the asking price. Therefore, if you shop at the top end of your budget, it will likely go out of your range.
Consider buying a fixer-upper to make the home your own and perform renovations. This can be a fun project and could save you money in the long run.
A final tip for potential buyers is to work with a licensed real estate agent to guide you through the home-buying process. It can be overwhelming, especially with the fast turnover rate. If you are looking for a realtor, I have a “clients-first” approach and will listen to your unique needs. I can answer any questions you may have about buying or selling your home. Call me at 717-253-3259 (cellphone) or visit my website at www.karentavenner.com.