by Tracy Graham
Having been a real estate broker for the last 15 years, I am frequently asked the same three questions: “How is the real estate market?” “Is it a good time to buy or sell?” “When is the best time to sell my house?” My response to all of these questions is always, “Why do you ask?” It is always a good market for somebody. It just depends on what you are trying to accomplish.
The 2021 real estate market is expected to be healthy after the incredible recovery in 2020. The biggest challenge to the real estate market locally and nationwide is the lack of homes available for sale. Currently, as I write this article in mid-February, Carbon Valley has less than a month’s worth of inventory available. In January, our local inventory for sale was down 46.5%, which equated to 99 fewer homes than in January 2020. In a balanced market, that number would be six months of inventory, great news for sellers.
What does this mean for buyers and sellers?
If You’re a Buyer:
The benefits of purchasing a home with our current interest rates are excellent. However, buyers need to be patient and tenacious while not getting too emotionally attached to one house. The first step is to select the right real estate agent, not just any agent. It would be beneficial if you had the right agent, a seasoned, active local real estate expert who knows your local market and the trends of what is happening to get homes bought and sold.
The right real estate professional will help manage your expectations and mindset to be patient and prepared for what it will take to find the right home in our current market. They will help refer you to local, top lenders to get you pre-approved for a mortgage before you begin your home search, so you’ll be ready to move quickly once you find a home of interest. Be prepared and flexible about looking at homes, preferably the first day they come on the market. Be ready to make a competitive offer from the start and know that it’s very likely you’ll be entering a bidding war. Work to calculate how far you are willing to go to secure a home and lean on your real estate professional as the expert to guide you through the process.
Potential buyers have expressed concerns with purchasing at the height of the market. It is important to remember that buyer purchasing power is greater with our historically low-interest rates, which equate to more buying power and a better time to buy.
The good news is, more inventory is likely headed to the market soon. Lawrence Yun, Chief Economist at NAR, notes: “To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December with more focus on single-family homes… However, it will take vigorous new home construction in 2021 and 2022 to adequately furnish the market to properly meet the demand.”
If You’re a Seller:
Realize our current inventory of homes for sale is at historic lows. More inventory will come to the market as we get closer to spring and further into the year, which equates to more competition. It is supply versus demand; when there is a shortage of homes and a strong buyer demand for homes, sellers are in a great position to negotiate the best possible terms. It can be price, move date, renting back after closing for a time, possible repairs, or other items, and sellers will be able to request more from a potential buyer at a time like this, especially when you have multiple interested buyers.
Selecting the right real estate agent to list your home is crucial to avoid leaving any money on the table and making it through closing. The right agent would be a hyper-local expert with extensive experience listing homes within your community. Selecting the right agent will pay for themselves above and beyond any commission you pay them.
In our current sellers’ market, it is easy to receive purchase offers. The challenge begins when receiving multiple offers and understanding the differences within each offer’s terms. Having an experienced real estate agent who knows how to vet the buyer’s agent and their lender to provide the most information to Sellers when presenting offers can be priceless in determining whether an offer has the potential likelihood to make it to closing or not.
The best offer does not always come down to the best price; it often is an equal combination of the best price and the best terms. The majority of contract offers include contingencies, a set of terms in the contract allowing the buyer or seller to cancel the agreement if those terms are not met. The beauty lies in the nuance of working with the potential buyer’s agent to craft the perfect contract, price, and terms to meet the seller’s needs and keep the buyer happy.
It is equally important to acknowledge the contract negotiation may not end once the property is under contract; it continues through the inspection and the appraisal process to closing.
In our current seller’s market, it is still important to set the right price to maximize desirability, attract the most potential buyers, and gain the best offers. Getting top dollar does not mean placing an unrealistic price on the property and seeing what happens. I am also not saying to underprice your home (although this can work too). It is essential to price your home correctly from day one.
If you have been sitting on the fence trying to decide when the best time is to sell your home or an investment property, many economists say it’s now to reap the highest benefits of selling.
Our housing market will remain strong throughout 2021. If you are thinking of buying, selling, or both, you need to know what that means to you. Contact your local real estate agent to discuss further. The more you know about your options, the easier it is to make an informed decision.
Tracy Graham is a hyper-local, award-winning, top-producing real estate expert, having served hundreds of buyers, sellers, and investors in Carbon Valley and throughout the Northern Front Range over the past 15 years. She became a real estate agent to ensure her clients had the best possible experience buying and selling their most valuable asset after she and her husband had a less than desirable experience purchasing their 1sthome. Tracy lives in Frederick with her husband and their 23-year-old parrot, Bubble. She is a REALTOR® with Keller Williams 1st Realty Associates in Firestone and can be reached at www.TracySoldMine.com.