After dealing with the house-buying boom of 2020, spring 2021 has seen a slight housing inventory shortage. According to the National Association of Realtors, the number of homes for sale in January 2021 was 26% less than in January 2020.
This has caused stiff competition and relatively high prices for much of the country. An unprecedented shortage of homes for sale has caused many properties to receive multiple offers, spurred by low mortgage rates.
Strong demand and fewer people listing their homes have caused the real estate market to undergo a tight squeeze. Also, whereas homeowners used to move every decade or so, current homeowners are opting to stay in their homes longer.
Potential homebuyers aren't completely out of luck, though. Following these practices might help you in a competitive housing market:
Get preapproved. To stay competitive with others, you should get prequalified to make sure you're ready to go once you find your dream home. Showing up at an open house, whether it's virtual or in-person, shows the seller that you're serious about your offer and can afford the price listed.
Pay more than the asking price. The simple reason behind this is based on supply and demand since prices rise when inventory is low. Make sure you can afford that higher price, though.
Be flexible on closing dates. If the seller needs to close the property quickly, your offer might be accepted over someone else's if you're willing to speed up the process.
The housing market might remain competitive for a few months or even a few years, so it's important to try to stand out from other buyers. If you need further assistance, don't be afraid to reach out to a loan officer or real estate professional.
Sources: Trulia.com, Bankrate.com