Purchasing a home today has been the most challenging in as many years as I can remember. Low inventory, competition with other buyers, bidding wars and much higher prices have created a lot of stress. Still there are many buyers looking for their perfect home whether it be their first or move-up space and location.
I have had numerous conversations with clients and try to discuss their specific needs and wants. I explain that they should go through a trade-off process and determine what is really important and what is not and most importantly to stretch their budget as needed. They should use common sense and not go overboard, unless they currently have more than ample funds and feel very confident about their current and future earnings.
The other option is to possibly consider a basic fixer upper that they can transform into their dream home. This will require hiring a contractor(s) and possible supervision and sufficient time to complete. This is obviously not for everyone, but can be the most beneficial if done properly. One must act quickly when a potential home is located and not wait until the weekend to go out to see it since it might already have an accepted offer by then. It may take some time to find the right place and location, but timing is everything and if you are lucky, it can be worth your while. This could build and add value and appreciation in right after the renovation is completed, adding to their current and future wealth.
Even with the current high prices, there are still places like Richmond and Virginia Beach, Va., Tampa and Orlando, Fl., and Tulsa and Oklahoma City, Ok., and other locations where owning is 5 percent to 28 percent more economical than renting. However, making a decision to leave and move to another state is a monumental undertaking and requires at least year or more to plan, unless a job is secured in advance and then decisions have to be made more expeditiously.
The $64,000 question is when will normal inventory be achieved and available? Due to the still strong demand for housing and still historically low interest rates, even though they have increased over the last four to six weeks, it’s going to take some time for more availability to come into the market. My guess is possibly within two to four years. Substantial increases in home prices and now higher interest rates have also eliminated more buyers who were maxed out on their budgets. The last implosion in 2008 saw inventory grow to 11 months (the time it would take to sell all those homes) and sales severely slowed, causing prices to decrease through 2011.
With current historically high prices, doing an inspection becomes mandatory for finding problems, unless you are a contractor or extremely experienced in fixer-uppers. Initially, it will be the most crucial and advantageous investment you should consider, especially if you have limited expertise. You don’t want costly surprises after the fact and don’t want to get stuck with a potential money pit.
Having access to your local MLS via a Realtor will provide you faster access to the limited number of homes compared to Zillow.com, Realtor.com or any other sites as we are the first to get the signed listings for the properties and then they are aggregated and sent over to all the other sites. We have a contact prospect matching system that sets up our clients on an auto feed first before any other sites and goes directly to our clients so they don’t miss anything that comes out for sale.
Consulting and guiding buyers is so key and even more critical in today’s competitive low inventory market. We are all very busy either working from home or on the job trying to earn a living, while still dealing daily with the Omicron virus, and all the protocols involved. Using a buyer’s agent today to represent them can be the most beneficial as they will legally have your best interest in mind (and not the seller, as the listing agent does). He or she must provide w/o limitation the following fiduciary duties to you as the buyer:
1.) Reasonable care
2.) Undivided loyalty
4.) Full disclosure
6.) Duty to account
Having a professional Realtor team up and assist you in the process of searching and finding you a home will potentially enable you to not experience going through the “fomo” syndrome (fear of missing out) on the one home that you would consider buying.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected]