Follow Our Tweets: @mris_Real_News Like Us On Facebook MRIS® - Real Estate in Real Time™

What Buyers Must Know Right Now

May 3, 2013  |  by Chris Sicks

Things change. Home buyers who do not recognize and adjust to the changes are going to have a hard time this year.

From 2007-2010 buyers were in charge. Sellers were so eager that they slashed prices and accepted many contingencies. Buyers could call most of the shots. If one seller wouldn’t make a deal, there was always another property down the street.

Not anymore. A shocking drop in the inventory of unsold homes means that today’s buyers are as disadvantaged as sellers were a few years ago.

I’ve provided you with two charts below that compare March 2013 stats with those from March 2008. First, look at the chart for sales contracts. Notice that sales activity has increased quite a bit.

Contracts March 2013 vs March 2008

Now, look at the chart for inventory. This is what today’s buyers need to digest. A larger number of buyers are trying to buy a much smaller number of homes than in 2008.

March 2013 vs March 2008 Inventory

Today’s buyers must understand that they face the stiffest competition we have seen since 2005. Therefore, buyers must:

1. Be ready to act — When the right home comes along, a successful buyer has to be ready to submit a strong offer quickly. Those who don’t will lose to better-prepared buyers.

2. Be ready to pay — Home prices are rising because of buyer competition. The two are inextricably linked. Don’t expect to pay last year’s price for this year’s listing.

3. Be careful — Despite what I just said in points 1 and 2, be careful. Many bad decisions were made in 2003-2005 because buyers were so eager. Trust your Realtor’s guidance when it comes to home inspections and other contingencies. Don’t overpay for a house you’ll regret owning.

There is some hope for buyers who do not get the home of their choice this spring: Summer and fall will be a little easier.

Buyers face the stiffest competition in March, April, and May every year. After that, things are less hectic. At the same time, this will probably be the most competitive summer that buyers have experienced in eight years.

—Chris Sicks has written about the local real estate market for the past 20 years.

Posted in Blog, Guest Posts, Industry News, Market Statistics

Next Post → ← Previous Post

10 responses to “What Buyers Must Know Right Now”

  1. Jose Garcia says:

    What about the impact that investors with cash make in this market?
    You can not ignore them.

  2. smackodu says:

    Even worse decisions were made from the end of 2005 through 2007 when liars loans were all the rage. Thanks Barney & Chris!

  3. Donald Sweigart says:

    You don't list Alexandria. Kindly include it.

  4. Frederick County, Maryland likewise, should be referenced, please.

  5. Nancy Mowry says:

    Such valuable info and I find very true in today's market. What they neglected to differentiate on is the price…homes that are over 1 million (unless the buyers have cash or 50% down) will have to qualify for a higher loan amount and will be scrutinized more on reserves, debt to income ratio, etc. therefore will not be flying off the market as quickly or have as stiff competition among buyers.

  6. Ekaterina Varley says:

    And how about Arlington ? It may be interesting to see the breakdown and trends between South and North Arlington as well to complete the picture. Thank you.

  7. MRIS_Jess says:

    Thank you to those who provided suggestions for areas to include. Mr. Sicks is a contributing writer and submitted this post to us for publishing. We will pass along your suggestions, but we do not directly dictate the areas he writes about.

    For those who are interested in more information about specific areas, you might consider purchasing an rbiEXPERT subscription where you can easily run reports on this type of information whenever you like. Visit rbintel.com for pricing, and remember, there's also a 14-day test drive so you can see what information is available to you.

RSS Feed