If you’re thinking about buying a home, you may be unaware of what awaits. Your expectation may not be exactly of what is really happening in today’s housing market. I understand that your beliefs and expectations are probably based on what you have read or heard. But the current housing statistics at face value don’t tell the story. It’s actually the cause of these stats that are telling and the force behind what is actually happening. Once you understand this, you can decide on your best home buying strategy.
First, let’s look at July’s housing statistics just published by the Maryland Association of Realtors (mdrealtor.org). Existing home sales decreased 22.6 percent from the same time last year. Homes that went under contract (Pending Home Sales) decreased about 8.3 percent from the same time last year. These home sale stats sound like what was being reported in the fall of 2007 (and you know what followed), especially since the forwarding looking stat Pending Home Sales decreased about 8.3 percent compared to the same time last year. At face value, you might conclude that such a huge reduction in home sales means that home buyers soured on the market (possibly because of the increase in mortgage rates you’re hearing about).
But home sale prices are increasing! The average home sale price increased about 3.2 percent compared to the same time last year, which is about $486,385.
So, what is happening?
New listings decreased about 34.5 percent compared to the same time last year! Active home sale inventory decreased about 35.7 percent compared to the same time last year! Basically, its supply and demand. When there is a shortage of a product when there is a demand, buyers bid up the price. The fierce home buyer competition is the reason why the median days on market for a home is only 7 days.
If you’re thinking that you can easily find your dream home and get a good deal, stop and do your due diligence. Know that you will be up against aggressive home buyers who are likely willing to bid up the price as well as waiving various contingencies to make their offer stand out.
What’s your home buying strategy strategy?
Before you go out and make an offer on home, take stock in what you bring to the table. Have you been pre-qualified for a mortgage? If you’re paying cash, is it liquid? Needing extended time to liquidate or bring funds from overseas is usually a non-starter for a home seller. Think about getting a pre-inspection so you know what you’re getting yourself into. Find a seasoned savvy real estate agent to help you navigate the market.
By Dan Krell
Copyright © 2023
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.