By Peter Ricci
The new year is just around the corner, and signs of the real estate recovery are evident in nearly every sector of the housing market: housing prices, which bottomed in early 2012, have been showing continued growth; housing inventory has been retaining its balance; and the new construction market has been finding its footing.
Now that housing is on the right path, though, 2013 may be a year of reeducation, with you explaining to your homebuyers that many post-boom tricks and patterns no longer apply.
We Don’t Need No (Re)Education? Homebuyers Might!
There are three remnants of the post-boom housing market that you may want to revise when dealing with homebuyers:
1. Lowball Offers – Remember what we just wrote about home prices finally bottoming, and even rising? That means that lowball offers are an increasingly unlikely strategy for prospective homebuyers. Though it must have been great in 2009 and 2010 to pick up properties for considerably less than the original asking price, those days are fast dwindling, and not just for conventional sales; even REO properties are not the steal that they used to be.
2. New Construction – The new construction market collapsed in 2007, and perhaps no sector of the housing market has been more battered in the post-boom marketplace; however, with distressed property inventories falling and more and more homebuyers entering the fray, homebuilders are beginning to pick up their efforts, and new home construction is poised to put up great numbers in 2012. So though new homes have been virtually non-existent, it may behoove your homebuyers to be on the lookout for new developments and incentives.
3. Don’t Dillydally! Housing inventory levels have dropped by nearly a quarter from 2011’s levels, namely for one reason: home prices. Between home sellers waiting for better returns and underwater homeowners waiting for positive equity, inventory levels have been on the decline for much of 2012, which means that homebuyers can no longer dillydally when looking for residences. Though the lack of competition must have been nice in 2009, the scarcity of good housing in 2012 has put a premium on the best homes out there, so your buyers may have to show some initiative – and maybe even outbid the competitors – if they want that dream home.
Are there other areas in the changing housing market that clients should be made aware of? Let us know with a comment!