Navigating a Market with High Demand and Low Supply
Good homes are coming off of the market in just a matter of days, with many selling over asking price—this is exactly what we’re seeing in popular emerging markets like Raleigh and Charlotte.
The housing market extensively depends on the dynamic of supply and demand, as housing prices generally rise and fall in sync with each. When supply is high, and demand is low, the price of real estate is low, and conversely, when supply is low and demand is high, pricing will reflect the lower end of things. Demand refers to both the quantity of homes wanted at the right price within a specific timeframe and the buyer’s willingness and ability to successfully purchase a home.
It’s important to understand how to navigate a market with high demand and low supply. The first step to navigating a seller’s market is to educate yourself on the current market conditions and to be prepared for what adjustments may be required in order to secure your dream home.
An inventory shortage will offer less homes for potential buyers to choose from, and because of this, you will encounter strong competition between different buyers. Good homes will come off of the market in just a matter of days, with many of these selling over asking price—this is exactly what we’re seeing in popular emerging markets like Raleigh and Charlotte.
For Buyers
Get Pre-Approved
Since the market is sped up thanks to the low supply, we recommend getting a mortgage pre-approval as soon as you can in order to not waste any valuable time. First-time homebuyers should review all contracts and paperwork well in advance of making an offer so there are no hiccups in the process.
Focus on What You Want
You will also want to understand what things you are willing to compromise on and look at homes that may not have every single “must have” item on your initial list. Since there are less homes to consider in this market, you will need to decide what’s essential and what to take off the list – otherwise, you may need to wait until market conditions improve.
Budget
Once you understand your budget, you should also look at options that are lower than the top of your budget in case you need to go over asking to be competitive with your offer. And when the time comes to put in an offer, work with your realtor to submit strong offers right off the bat.
For Realtors
Some sellers will be in a hurry, so once you’ve found out what the standard closing time is, you can see if there is a way to put in an offer that will help to close quicker. This could be the tie breaker in your client’s favor.
Perhaps one of the most important things you can do as the trusted agent is to remind your client of the age-old adage, “Slow and steady wins the race.” In a hot market, a buyer may submit multiple offers before actually winning one, and that can be discouraging at best. You can always advise your client to consider pausing their search and resuming during fall or winter, when the market tends to slow down some.
Working with your clients in a seller’s market can be incredibly stressful, but with the right preparation and knowledge, you and your home buyer will navigate the market and close on the home of their dreams.
Consider Custom Home Building
The best way to bypass the madness of current market conditions is to skip it all together because the market to buy lots, land or homes for teardown is far less competitive. You could spend 8-10 months going the traditional route of trying to purchase an existing home, or you can get started on designing your dream home from the ground up.
Buyers are already thinking about the most important aspects of their future home and neighborhoods that matter most—now’s the perfect time to think about the entire package. Atmos allows you to view all available lots in the areas you like best and to compare the different floor plans you like—contemporary, modern, farmhouse and more. Then your project manager will work with you to customize the exterior and interior of your home to build it just the way you want it.
Start building your dream home today!
