It's a Seller's Market and a Great Time to Buy

No doubt, today's real estate market is quite unique. We are in a seller's market with historically low interest rates and some great loan programs. This is a winning combination for both buyers and sellers (and Realtors - looking for a career change?). But it's not unique just because of the buy and sell market. The rental market has also been exploding as result of the 2008 market crisis and that's not a win/win for landlords and tenants. Landlords, yes. Tenants, no. First, let's focus on what a Seller's Market is. A seller's market is a real estate market that favors the seller. For instance, homes on the market are selling quickly and they're getting their asking price or higher. A seller's market is very competitive and buyers tend to do whatever they need to do to win a bid. This may mean waiving inspections (sellers love this), paying cash (they love this, too), paying more than the asking price even if the appraised value comes in lower and/or a quick settlement, though that depends on the seller's circumstances. During a seller's market, sellers are more likely going to see multiple offer situations due to the low inventory of homes on the market and the number of buyers looking for homes. It is the definition of "supply and demand." Now, let's focus on what makes a Buyer's Market. This is where the buyer is in the driver's seat. In a buyer's market there are more houses on the market than there are buyers so buyers have many choices. Days on market tend to be longer which means a seller will likely be more willing to negotiate terms that are more favorable to the buyer like accepting less than list price, making repairs/improvements, and/or offering or accepting to pay seller assist, to name a few. So what makes the current real estate market unique? Well, not only is it a seller's market and a great time to buy due to historically low interest rates which makes it a win/win for both sellers and buyers, but it's also a great time to buy rentals and be a landlord. Rent prices have gone up significantly since 2008 when the real estate market collapsed. If you're looking to invest in real estate, this is a great time to buy but I will say your offers must be aggressive in order to win a bid these days. Both owner occupied and tenant occupied properties are necessary for a healthy real estate market and a community to thrive. But keeping them in proper balance is the key. Too many rentals and the neighborhood home values tend to go down. Too little rentals and tenants may not have the opportunity to move where they choose to. Bottom line is that when a neighborhood has the right balance of both owner occupied and tenant occupied properties, you have a healthy stable community and real estate market. I've always heard that too many rentals in a neighborhood can hurt property values and generally speaking I believe that's true. It's said that the reason for this is that home owners tend to take better care of their property than tenants. Of course, this is not always the case because some home owners may not have the funds to do necessary repairs or improvements.

After the market crash in 2008 we saw the instability of home ownership go up as well as the rental market.

In a 2016 article from PAR Just Listed, the author states that the crash created a whole new rental market. Not only were rentals hard to come by but those from all income levels were in need of rentals since many either had to sell their homes in a short sale or they lost their home to foreclosure. Have you seen the high cost of renting these days? Rents have sky-rocketed like never before.

There are many reasons why someone wants or needs to rent. I'll name a few here.

• You're not sure where you want to live: If you're renting because you're not sure yet where you want to live, it's time to make some decisions. Interest rates are historically low.

• You don't think you can afford to buy a home: If this is you, we need to talk. If you think you can't afford to buy a home now, chances are in five years, you'll think no differently.

• Your credit is not where it needs to be or you're afraid to find out how bad your credit is: This can remedied. No one is going to ridicule you for jumping in and tackling your credit situation and habits that have to do with your mindset. In fact, you can help others who need a little push too. The problem is, if you continue to put off working on your credit, you'll find yourself no further along in six months, a year from now or even five or ten years from now. So don't delay any longer.

• You'd rather make high rent payments and pay for someone else's investment. What?? Yes. That's what you're doing if you continue to rent because interest rates are so low.

Whatever is holding you back from moving forward, don't procrastinate any longer. What you do today will make a huge difference in your future. Time goes by so fast these days that before you know it five years will go by. Fear and fear of the unknown is what paralyzes people. But we're here to help you and guide through the whole process from beginning to end no matter what financial situation you're currently in. You will not be in this alone. Give us a call today even if you think you won't qualify right now. Call us!