Thank you Kyle Gruber for joining us on this episode of Waypoint Real Talk where we give tips for buyers in a seller’s market!
Listen to the podcast below or watch the YouTube video below! We also have typed the podcast in a nice blog format for you below.
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About Kyle Gruber
Kyle is a top agent in his office at Real Living Casa Fina Realty and services Pinellas County, Florida.
What Makes a Seller’s Market?
The overall condition of a seller’s market consists of: little inventory, rising prices, and more demand than there is supply.
In Pinellas County, and many other areas, this is exactly what is happening:
- Little inventory, creating a very strong seller’s market
- Very little new construction, have to rely on resale (no land to build on)
Statistics of June 2019 and June 2020 in Pinellas County, FL.
Active listings for June 2020: 1832
Active listing in June 2019: 3,049
This means active listings in June have decreased 39.9%! Next, we can evaluate closed sales to see how many people are buying homes.
Closed SFH Sales
June 2020: 1,296
June 2019: 1,178
So closed sales in June 2020 have increased 10% even though active listings has decreased 40%.
Will housing market, and pricing come down due to the pandemic? Should buyers wait?
To answer that question, you should look at historical data of the area you are looking to purchase.
Here is that information from Pinellas County, FL.
Median Sale Price for Single Family Homes was up 12.9%, at $248,450 for June 2017 versus $220,000 for June 2016.
The Median Sale Price for Single Family Homes was up by 7.2%, at $266,375 for June 2018 versus $248,450 for June 2017.
The Median Sale Price for Single Family Homes was up by 3.2%, at $266,375 for June 2018 versus $275,000 for June 2019.
The Median Sale Price for Single Family Homes was up by 9.1%, at $275,000 for June 2019 to $300,000 for June 2020.
This has shown that the Tampa Bay Area is a great place to invest in since prices have historically increased the last 4 years! Not to mention the combined low interest rates from COVID-19.
Here are other things to consider for your area, that make Tampa Bay a great place to invest.
- No state income tax
- Significant drop in daily new COVID cases
- Affordable cost of living
- Affordable housing
- Good forecast for economy and job market
- Expensive rent vs buy scenarios, favoring buying
- Desirable climate
- Continued new construction coming in to ease inventory (not so much Pinellas County)
- Strong buyer demand, both from local buyers and from out of state
- Increased international interest for investment
Basically, what this leads to is a market that is in HUGE demand! So, what do you do as a buyer to make sure you can get a home?
Tips for Buyers to get a Home in a Hot Market (seller’s market)
- Make sure you’re pre approved from a great lender.
- Make sure you’ve provided documentation.
- Use a SEASONED AND EXPERIENCED buyer’s agent who has a track record of winning multiple offer situations.
- You should be set up on MLS target search to get immediate updates on new listings.
- Don’t expect discounts in these situations. Often times will have to go above asking price depending on the situation.
- Tighten up your terms and timelines.
- Try to avoid asking for sellers to pay your closing costs.
- Save up for down payment AND closing costs. If you need assistance there are programs out there, but are not advantageous to buyers in regards to lower rates/payments
- DO NOT HESITATE, if you‘ve viewed a home you love put an offer in immediately, if you don’t someone else will, it’s happened to me several times with buyers. You risk nothing with an offer.
- Cash will win most times. Conventional loans will be favored over FHA/VA.
- If you lose a multiple offer situation, don’t get discouraged. Deals can and do fall through. Next time you are in a multiple offer situation you’ll bring your A game
- Realize you’re protected with contingencies. Inspection period, appraisal contingency, loan approval.
If Your Offer Gets Accepted – More Tips
- Be sure to stay on top of anything lender needs.
- Do not make any large purchases that could affect your credit.
- Understand homes are sold “as is” Don’t expect seller to repair every single item on an inspection report, and understand they are not obligated to make any repairs. Keep it to major 4 point (Florida Related Inspection) issues.
- There are buyers who lost out during bidding that are waiting in the wings!
Concluding
Purchasing a home in a seller’s market is not a bad investment move.
Understanding the market, interest rates, and your deal, can drastically change your investment return.
Be sure t understand your market and use these tips to come out on top in a seller’s market.
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