Understanding the Numbers When Buying in a Low Inventory Real Estate Market
As a homebuyer in today’s market, you’re no doubt at your wit’s end trying to find your dream home.
And when you find a home you love, you’re competing with all cash offers and bidding wars driving the sales price above what it’s listed for, and many times, even above what the home is actually worth!
While there is nothing you can do to create more homes for sale, you can certainly arm yourself by understanding the trends and patterns in the areas you’re trying to buy in.
While it’s not quite rocket science, there is definitely a significant competitive advantage to those that understand the trends of a real estate market.
Sometimes, being competitive means not looking in the most competitive price ranges in the most competitive markets.
Analyzing Market Trends and Statistical Data
Understanding the nature of the market, and preparing yourself for the journey (or battle) is probably the most critical step for managing your expectations. You can find Bidding War Strategies HERE
One tool that all Agents/Brokers of The Cascade Team Real Estate have access to is the “Market Snapshot” tool. This tool is also made available to the public on www.TheCascadeTeam.com website and is located HERE
In the last few weeks the market has overheated with sales and pending sales outpacing new inventory thereby driving already scarce inventory levels even lower.
With inventory sufficiently low we are deep in a Seller’s Market zone, so watch changes in the Market Action Index. As the market heats up, prices are likely to continue on a rather rapid upward climb.
Inventory of Properties Listed for Sale
Inventory has been falling in recent weeks. Note that declining inventory alone does not signal a strengthening market. Look to the Market Snapshot Index and Days on Market trends to gauge whether buyer interest is changing with the available supply.
Northwest MLS brokers say real estate activity across Washington remains strong
There are many other sources of housing statistics and trend reporting that your local real estate agent can provide you. Market Snapshot is just one of those tools.
While there is nothing you can do to create more homes for sale, you can certainly arm yourself by understanding the trends and patterns in the areas you’re trying to buy in.
While it’s not quite rocket science, there is definitely a significant competitive advantage to those that understand the trends of a real estate market.
Sometimes, being competitive means not looking in the most competitive price ranges in the most competitive markets.
We looked at the data on thousands of offers agents for The Cascade Team wrote and received in the last two years to see how the strategies we track affected buyers’ odds of winning a bidding war:
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