Have you been searching for homes all summer, and still haven’t bought one?
Do you feel like the inventory has been mostly garbage that you wouldn’t buy at any price? Then once or twice a month you see a nice buy that turns into a bidding war and you don’t win it? It happens, and unfortunately it might keep happening so be resilient.
This is the time of year when buyers want to give up.
It’s easy to get discouraged because you aren’t seeing as many new listings come to market these days – it’s hard to pay attention when days or weeks can pass without seeing a decent house.
Here are reasons why you should hang in there:
- Competition is waning. Some of the people we’ve been competing against have bought houses, but most importantly, more buyers have given up on 2020, and will wait for 2021.
- Inventory is dry, but you only need one.
- You can still get a mortgage rate that starts with a 2.
- It will be worse next year.
Looking at houses has never been more annoying. Agents have gone nuts with their demands for masks, gloves, booties, bank statements, preapproval letters and your first-born just to see a house. Many aren’t even nice about it – they have plenty of showing requests, so their attitude is if you don’t like it, kiss off.
If it bothers you that much, just wait a couple of weeks – they get more accommodating the longer the house is on the market. But know that these demands have become a tactic to screen out buyers so they don’t have to work as much. I heard a listing agent complain recently about having to process paperwork for 52 showings – you know many just stop answering their phone.
While it is a hassle, you must see the best homes in person in case it’s a winner and you want to grab it.
What can you do to make the search more bearable?
Here are a few tips:
- Revise your auto-searches. They are ‘upgrading’ the MLS this weekend, and our realtor auto-searches will need to be re-inputted. It will be a good time to re-visit yours to make sure they weren’t affected, and while you are there, bump your price up. It’s the best way to see better quality!
- Use the 3D tours to save time. You’ve heard me say that Matterport 3D tours are terrible for sellers because agents rely on them to do the selling. But the 3D tours are fantastic for buyers – be patient with them and remember that you will find something wrong with every house.
- Use Google Street Views to cruise the neighborhoods. How many times to you roll up to a new listing and the immediate neighbors make you want to keep driving? Avoid those time-wasters by viewing the neighborhood online.
- Accept the fact that every house will need $25,000 to $50,000 in improvements/upgrades. You will have to compromise somewhere – don’t give up on a house just because you find a defect. Money will fix everything except location – rejoice when you find something to fix!
- Be prepared to make strong offers. Know the comps, have a solid preapproval letter, and shorten contingency timelines – which I hate to do but it’s one of the addictions now.
- The market isn’t going to go down. Today’s inventory is almost entirely full of the homes that have been passed over for weeks or months. Longer market times and price reductions only mean that those are dogs, not that the market is suffering. You want to buy a premium property anyway, and those will always be in fashion.
Keep the goal simple: Buy the right house, at the right price.
Be picky, rely on your tools, keep a laser focus and remember that it only takes one.
The market isn’t going to go down.
Bold prediction, but I see plenty of price cuts.
Layoffs continue to tick up, any now they’re hitting the upper-tier white collar role.
We’re in a period of time with the lowest corporate and personal tax rates ever – and they’re going up.
Is California’s balance sheet going to improve next year?
Do you see Gen Y and Z being more prosperous than Gen X?
Take the other side of this trade and wait.
If you don’t mind buying inferior homes, then waiting might bear some fruit.
The problem with waiting is it won’t change the sentiment of sellers who own a premium property. They know they have quality, and they will wait until they get the price they want.
You can wait Richard. But not on my lawn!
“It’s never a good time to buy a home in California.” People have been saying this for 60 years. It’s time in the real estate market and not timing the real estate market. Otherwise, you should have bought in 2011 and selling now if your investment horizon is short-term (less than 7 years). Flippers will get eventually get caught with their pants down.