Likely to be a hallmark of this year’s spring home selling season: Bidding wars. As home listings are scarcer and buyer demand remains high, home shoppers are discovering considerably more competition this spring, particularly in hot markets such as San Francisco Bay area, Denver, and Boston.
Bidding Wars to Get Hot This Spring
“Home buyers are going to find this spring that, in a lot of markets, the inventory of homes priced and sized at price levels they were hoping for will be very limited,” Thomas Lawler, a former Fannie Mae economist who’s now a housing consultant in Leesburg, Va., told Bloomberg. Even “unlikely places are getting significantly tighter.”
An improving employment market, growing consumer confidence, and the threat of rising rates on mortgages have Americans flocking to housing. However, many markets remain tight for listings. Housing starts remain well below levels prior to the recession and are geared more toward the higher end of the market. Homeowners also are reluctant to sell their existing home because they’re unclear about where they’d move to with the dearth of listings.
Homes are selling at a rapid clip in places like Denver; Seattle; Oakland, Calif.; Grand Rapids, Mich.; Boise, Idaho; Madison, Wis.; and Omaha, Neb., in accordance with the real estate brokerage Redfin.
Grand Rapids has seen a 27% decrease in the number of homes for sale over the past year. One listing alone reportedly attracted 40 bids.
“People need to get their houses on the market, but they’re gun-shy,” Tanya Craig, an associate broker with the Katie K team at Keller Williams, told Bloomberg. “Unless they know where they want to go, everyone is hesitant.”
Home buyers certainly aren’t being hesitant, if they can find a home they want. They’re in a rush for financing too. The 30-year fixed-rate mortgage has risen by more than half a percentage point since November 2016. The Federal Reserve a week ago voted to increase its benchmark interest rate by a quarter point and strongly hinted it might do so two more times this year.
The 30-year fixed-rate mortgage is expected to increase to 4.7 percent by the end of 2017 and may reach 5.5 % next year, according to Lawrence Yun, the chief economist for the National Association of REALTORS®.
“In today’s market, many buyers think the trough in rates is over,” says Sam Khater, deputy chief economist at CoreLogic. “If you don’t get in now, it’s just going to be worse later. Rates will be higher, prices will be higher, and maybe inventory selection will be lower.”
Nick & Cindy Davis with RE/MAX Premier Group are here to assist you in finding your new home here in the Tampa Bay and Surrounding Areas. We are always just a click here or call to 813-300-7116 away.
To Find Your New Home Start Here!
