April 17, 2018
If you've been in the market for a home in the last year or so, you are well aware of the news that came out this week, that today's market is one of the most competitive in history.
A combination of low inventory and a rising number of buyers (especially millennials) is creating a stressful situation for buyers. And it's creating a windfall for sellers, as real estate values climb. Check out the recent appreciation in Gainesville:
Three years ago, the average price of a home in Gainesville was just over $200k. Today, it's just under $275k. That's about a 30% increase. Moreover, inventory in Alachua County continues to be extremely low, especially under $300k:
If you're in the market for a home under $300k, you're finding very little to choose from. 6 months inventory is considered "balanced" and once it goes below 4 months or so, we are in a seller's market. In Gainesville between $100-$200k (starter homes), there are fewer than 3 months supply!
Consider the situation we faced about 8 years ago - when there were an unlimited number of homes on the market and almost no buyers because of the economic downturn. Our current predicament is the exact opposite - many buyers competiting for few homes on the market.
It is overall great news for sellers but the trouble is, many sellers are afraid to list their homes, for fear they will not find a home to buy! It's a vicious cycle and there's no sign of it ending anytime soon.
In response to this, there are companies offering services to aid in bidding, such as converting an offer to "all cash" - such as Ribbon. For a fee, Ribbon will "guarantee" your offer and allow a quick closing, giving you time to secure a mortgage once the property has sold. This gives you a huge leg up over buyers attempting to buy with a traditional mortgage.
Bottom line: buckle up! Market conditions + new technology will make for an interesting next couple years.
