While there is strong buyer demand, a giant lack of inventory in the housing market is creating a roadblock. This leaves home shoppers in a tight spot.
The most recent pending home sales report from the National Association of Realtors said that sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets.
The report added that while existing-sales are projected to expand next year, ongoing inventory shortages and affordability pressures from rising prices and mortgage rates will likely temper sales growth to around 3% (5.45 million) in 2016.
Additionally, Frank Nothaft, chief economist for CoreLogic (CLGX), said in the latest Home Price Index report, “Many markets have experienced a low inventory of homes for sale along with strong buyer demand, which is sustaining upward pressure on home prices. These conditions are likely to persist as we enter 2016."
Since the problem isn't expected to go away anytime soon, Sharon Voss, president of the Orlando Regional Realtor Association, gave a few tips to HousingWire on what home shoppers can do to secure a home when inventory is low.
“If you’re seeking to purchase a home in an area with tight inventory conditions, it’s important to assume that there is going to be competition from other buyers and be ready to quickly make a solid offer,” said Voss.
Here are seven tips to lock in your dream home in a tight inventory environment:
Have your finances in order: Know how much house you can truly afford, repair any credit issues, have your down payment in hand, and delay major purchases.
Get pre-approved for a mortgage, over and above getting pre-qualified.
Determine in advance which home features are “must-have” and which features are “nice-to-have.”
Know what contingencies you are willing to eliminate from your offer.
5. Best offer
Make your best offer up front; you might not get the opportunity to negotiate further.
6. Be available
Be easily accessible and prepared to make fast decisions and to respond quickly to questions about your offer.
Hire a Realtor to help you locate, select, and negotiate.