Entry-lever buyers face a market with a shortage of inventory, pushing up prices.
A lack of homes for sale in many parts of the county is making house hunting a challenge, especially for first-time buyers. This tight housing inventories have pushed up home prices, creating bidding wars for some properties.
The reasons for the tight inventory vary. In some areas, homeowners still owe more than their home is worth, or they are unable or unwilling to sell until prices rise more and they gain equity. In other areas, the lack of new home construction is contributing to the problem. Also, homeowners who want to sell their homes and trade up can’t find a suitable new home, so they stay put.
The lack of homes on the market has resulted in higher rents. Hence, investors who bought single-family homes during the downturn are making good money renting them and are in no hurry to sell.
Q & A
What can I do to prepare to buy a house in a tight market?
Get preapproved for a mortgage, so the seller knows you are serious, and make sure you have a loan approval letter. The letter means the lender has run a credit check, verified income and has authorized a loan for a specific amount.
Are there other ways, besides price, to make my offer attractive?
Putting down as large a deposit as possible shows you’re serious. Agreeing to requests that reduce hassles for the seller can help, too. For instance, if the seller asks to leave behind a backyard swing set, you may want to agree – even if your children are too old to play on it. Try to give the seller reasons to say yes to your offer and make it easy on them goes a long way in today’s market.