Where are all the homes for sale!!!!!?
From 2015-2019, you could find houses that sat for months! You would drive through your community – and see a new sign go up every day. Now, you can hardly find ONE home for sale.
When you do find a home you like, you often call or text your real estate agent – only to learn that it sold yesterday – or is already pending. Welcome to a seller’s market. Come one. Come all. Open your eyes and see the beast of this market. The brutal reality of trying to buy a home in this market. Watch as a home flies off the market faster than lightning. Here one moment, gone the next. Come watch as the price of a home climbs higher and higher. To near death-defying heights.
A seller’s market is known to be unforgiving and relentless to a home buyer. The wrong move could cost you for years. For example, consider all the people who bought a home in 2007 to 2008. They bought at the top of the market, and when prices came tumbling down, it wasn’t good. If by some chance, they were able to ride out the storm, there was little equity in their home, even after home values have recovered. Meaning, they’re trapped nearly a decade later.
Not Enough Homes For Sale
House hunters today will need to pound much more pavement to find their dream home. The inventory of homes for sale is at an all-time low. As of today (Jan 2022) – there are only 517 detached homes available in the entire city of Calgary…and many of those may be conditionally sold. This equals .5 months of inventory based on the current pace of sales.
A normal, balanced market offers about six months of inventory!
The fact remains: there aren’t enough homes for home buyers to look at. Rather than having a list of 50 homes that match their criteria, there may be only 2-5. Home buyers are forced to pick a home from a smaller and smaller selection. There is an increased chance that they will have to make sacrifices or wait months to find their dream home.
Many experts believe the only thing missing in this market are the sellers. There is huge demand right now from home buyers. The solution? Wait? Wait until they show up?
I prefer an active approach. If you want to find your next home – and have a wider selection of homes that match your criteria, then we might have to drum up our own homes for sale!
One way to do that is to send letters to a neighbourhood you want to live in! A few tips to make this most successful. It’s best to hand-write everything. From the letter to the envelope. It’s also a good idea to use a real stamp rather than some kind of bulk stamp. Drumming up your own homes for sale – is one way we can help overcome the challenge of not enough homes for sale.
Too Many Buyers Want the Same Home
There will be a lot of frustration, stress, and maybe tears. It’s almost impossible when you’re staring down the barrel of a multiple offer situation. Your emotions will run high. The low inventory causes multiple buyers to write offers on the same home. This creates a situation for bidding wars and highest-and-best. Both of which drive up the price of a home.
A bidding war is when multiple parties compete for a home by continuing to increase the offer price of a home. Really nobody wins during a bidding war. The buyer whose bid is accepted – often made an offer that is far higher than the house is worth. We are seeing non conditional offers – $100,000+ over list!
The only way to win is to not play at all. Instead, you may need to play a different game. It’s better to look at homes – where there are no buyers. This way, when it comes time to write an offer, you’re the only one!
Instead of scrolling past and ignoring the “ugly listings”, only look at those. You probably know the “ugly listings” I’m talking about. There are either no photos, the lighting is terrible, there is hardly any description. Many of us are tempted to skip them and we do. Sure, some of them are crappy. However, there are plenty of agents who are listing great homes, but they do a poor job marketing them. Let’s be creative together!
During a hot seller’s market, we reach a critical point where the value of a home begins to reflect not the existing market conditions, but rather the anticipated growth to come. People begin buying houses based on a future market rather than the current one.
Your risk for overpaying increases. What happens if you pay for a home – based on a future market that never occurs? This negative equity position will hurt you when the market goes down. It will make it tough for you to sell and you may be stuck in your home. To build up equity and keep yourself in a good position, you have to avoid paying for a home based on it’s future value. You want to look at what it’s worth today and only today.
Selling And Buying At The Same Time
It’s best to limit your contingencies if you want your offer to get accepted in a seller’s market. Writing an offer that is dependent on your ability to sell your current home – will likely get your offer rejected. Sellers will accept the offer with the highest price – and the fewest contingencies – because it represents less risk. You would too if it was you!
However, if you write an offer on a home – without your home being sold – you may end up with two homes (and mortgages). Waiting until your home is sold on the other hand, could leave you homeless. This is a real challenge for many of my clients…plus the rental market is strong now as well.
Over Confident Sellers
It’s easy for some homeowners to feel like their home will sell no matter what. And to be honest, they are half right. You will experience many types of sellers in this market. Some will ask far more than their home is worth. Others will be unreasonable when it comes to the kind of offer they will accept. And some will present their home in a less than flattering manner — piles of laundry, messy, cluttered rooms, and repairs needing to be done.
At times, the overconfidence of a seller can be frustrating. Half of succeeding in this market – can sometimes be a mental game. Work with a good realtor – who cares about your outcome – not just selling another home!
Author: Karen Keveryga – Realtor, Royal LePage Benchmark