The couple had looked at five houses for sale and really liked one. But they told their real estate agent they would like to keep looking.
“If there's a house you really like, you should put in an offer today,” the agent advises. “Otherwise, you'll miss your opportunity.”
The agent isn't just blowing smoke. In today's real estate market, the low inventory of available homes has made it a seller's market, and desirable homes are selling quickly.
“Days on market” can be a strong indicator of the housing market, and when that number goes down it tips the balance in favor of sellers. This month real estate marketplace Zillow reported time on the market before selling has been steadily falling since 2010, when homes took an average of five months to sell. The national average is now 78 days from listing to close.
Big cities are booming
The market has picked up the most in large metros, with the average selling time falling by at least two weeks in Pittsburgh, Philadelphia and Charlotte, N.C. The fastest-moving homes, according to Zillow, are in the entry-level price range.
"Homes are selling faster than ever as the home shopping season hits its peak," said Zillow Chief Economist Dr. Svenja Gudell. "If you're looking for a home, be prepared to move quickly.”
There's no question the low inventory of available homes has added to the fast moving market. And the situation doesn't appear to be getting any better. New home construction remains historically low while potential move-up buyers aren't selling their homes because they aren't confident they can find something they like better.
Inventory down 38% from peak
Zillow reports the inventory of available homes is down nearly 5% from a year ago and is 38% lower than it was in 2011, at the depths of the housing recession. That means someone shopping for a home will need to be able to make a decision quickly.
To get a leg up in today's market, Zillow says buyers should have met with a lender and secured preapproval for a loan, even before looking at a property. The preapproval will tell you how much mortgage you can obtain and will help narrow the price range of houses in the search.
Buyers should also strongly consider working with a real estate agent, preferably one well-acquainted with the area.
Normally, an offer is submitted with a contingency for a home inspection. Zillow suggests asking to make an inspection before you make an offer. You could lose $400 or so if you decide not to buy the house, but if you are then able to make an offer with no contingencies, you stand a better chance of getting the house in case there are competing offers.
If you are buying in a competitive market, don't expect a lot of wiggle room in the negotiation. The combination of tight inventory and strong demand is driving prices higher. If it is a house you really want, you may need to meet the asking price – and in the case of a competitive bidding situation, offer above the asking price.