As the 2014 spring market begins to ramp up and people come out of their hibernation from winter, what can they expect to find? One of the biggest changes we will see is the lack of inventory for available homes. The National Association of Realtors reported existing-home sales rose 1% in December 2013, to 4.87 million and for the last year, sales hit 5.09 million, the most since 2006. This is up 9.1% from 2012, dwindling much of the current inventory.
According to Jed Kolko, chief economist at Trulia, “We saw less distressed sales and more conventional sales last year, which means foreclosures and short sales are making up a smaller share of overall sales. Conventional sales were up 12% last year.” Prospective buyers should begin their housing hunt early and may have to possibly be willing to compromise some of their “must haves” in order to find their new home in the upcoming year.
Another potential problem for the upcoming spring market is the reality of multiple offer situations. With inventory so low, most homes will have many buyers bidding out each other for every property. At Compass, we suggest that if you are not a cash buyer and are going to make an offer, a pre-approval may not be good enough and you should get a Loan Commitment. With this commitment, you actually complete all the paperwork and the loan is approved subject only to an appraisal, giving you the confidence and ability to close quicker than other mortgage options.
Thinking of making a home purchase this spring or summer? Our Mortgage 101 Handbook is the ultimate guide for first time homebuyers.