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Multiple Offer Madness! Low Inventory Warning!
Dated: March 29 2021
The buying frenzy continues as multiple offers become the norm and buyers offer thousands or tens of thousands above the asking price to try to get the home they want. In many cases, buyers also are increasingly waiving appraisals and even some inspections to make their offers stand out.
Buyers are also feeling a greater sense of urgency as mortgage rates begin to rise, and they’re eager to lock in a low rate ahead of any further increases.
It is now the norm to receive multiple offers in the first few days of listing a property. We are seeing 5 to 10 offers being put in on desirable houses. An agent in our firm received 15 offers on a property before the deadline, to cut off receiving additional offers.
The supply of homes for sale in Houston has fallen to its lowest level in nearly six years, putting sellers in the driver seat and creating a frustrating market for buyers.
Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly
To show you how low inventory has gotten take a look at 'Months of Inventory' in all of Harris and Fort Bend Counties, only 1.1 months of inventory! This means if no new homes hit the market, all the homes would be sold in a little more than one month's time frame.
The Gifford Group can help you with your home search and help get you into your new home today!
Taking a look at the supply of houses in Tomball, Katy, Missouri City, Richmond, and Fulshear all have 1.5 months of inventory or less. Katy only has .6 months of inventory!
Katy has less than 1 month of supply! Be sure to be ready to make an offer quickly.
Nationwide, 36% of homes sold above list price in February, the highest share on record, according to housing data from Redfin.
“This is the strongest seller’s market since at least 2006,” says Daryl Fairweather, Redfin’s chief economist. “Buyers outnumber sellers by such a huge margin that many homeowners are staying put because they know how hard it would be to find a place to move to. It seems like the only move-up buyers who are confident enough to list their homes are those who are relocating to a more affordable area where they’ll have an edge on the local competition.”
Despite the rapid price increases, this isn’t a housing bubble, housing economists say.
“Yes, some buyers are overpaying for homes, particularly those who are moving to affordable destinations and paying well over asking prices to win homes in bidding wars,” Fairweather says. “But these buyers are often covering any shortfall in the bank’s appraisal amount and locking in low monthly mortgage payments that they can easily afford. As mortgage rates rise, I expect demand to settle down and be better balanced by more new listings as high home prices lure more sellers to the market.”
If you are in the market to purchase a home, the best thing to do is to be prepared before you start shopping.
- Get Pre-approved, we can connect you with Local Mortgage Brokers to get you the best rates.
- Know how much you can afford.
- Figure out what buying a home will really cost, and start saving for the down payment now if you haven't already.
- Write down must-haves versus nice-to-have when home shopping. Remember you have anything you want, just not everything you want.
- Also, if you have a home, you can buy a new home before you list your home for sale, with our Home Swap program.
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