If you are just starting to think about buying or selling this year, its worth taking a moment to get familiar with the covid-era market. Its a bit crazy out there....
Zillow has recently noted that the greater Philadelphia area is seeing a 10% increase and will continue to do so this Spring and potentially into the next year.
On the Buy-Side
If you are a prospective buyer, be ready for a difficult market. Inventory was short before the pandemic. Often, on desirable properties, we would see 5-15 offers on a home. Multiple offer scenarios were certainly a common scenario. But then came covid, market falls and thus, record-low interest rates. At first, with the real estate market closed for business, we only began to see interest drive up. People were still unsure about going out into the world and sellers were weary of putting their homes on the market. But as time went on, and interest rates remained low, the market heated up.
When 2021 began, things got particularly rough. January was brutal, and not just with the snow. Rates were so low that the market was absolutely flooded with buyers. With what was almost-free money, everyone wanted to buy. Everyone. Many homes, even normally less-desirable ones, were going under contract within days, if not hours, drastically above asking and many with over 20 offers.
Recently, interest rates have gone back up to a more pre-covid level. Still, wonderfully low right now, it may disinterest some buyers or even cut out a few from being able to afford a home. What we continue to see in the current hot-market areas is steady competition.
Within multiple offer scenarios, expect to see your competition potentially offer cash, likely waive inspections, agree to pay cash over appraised value, etc. For the risk-adverse, this isn't an ideal market in which to purchase. But, inventory is starting to accumulate in many places and there are certainly areas where homes aren't as competitive. Just be sure to outline exactly what your level of risk is ahead of getting into a multiple offer scenario, know the pros and cons of any decision and don't get caught up in the moment and get cold feet with an accepted offer.
On the Sale-Side
Welcome to the dream market! If you aren't insane with pricing your home, and there isn't anything completely odd about this property (like they are digging up an old graveyard in your backyard), now is the time to get the most amount of money for your home. Sure, some homes are still sitting, be it from poor pricing, a particular oddity or lack of desirability, but if you have an average home in a market that is seeing movement on most properties, its an incredible time to sell.
That being said, most people who sell a home need to find a new one. In this market, as noted above, that might be difficult. Have a plan in place in case you need to move out of the old place and have yet to secure a new one. That might be a rental, short term housing, airbnb, or renting back your home from the new owners.
Also, while there are plenty of fixer-uppers that go quickly off the market, its still advisable in this market to put your best foot forward. Minor cosmetic upgrades, staging and small repairs may make for sizeable return on investment in this competitive market!
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