Over the past year, the term “unprecedented times” has been used so often that it has ironically become commonplace. Our country has endured a pandemic, an economic recession, political uncertainty, and a struggle for social justice.
Amid so many challenges, REALTORS® have found themselves in a unique environment, working on behalf of buyers who face challenges unlike those of previous years. For the next several weeks, Virginia REALTORS® will explore the unique challenges homebuyers are facing in 2021 and how YOU, the REALTOR®, can help them navigate these challenges.
The first new challenge we’ll tackle is INVENTORY, or rather, an extreme lack thereof. The downward trend (which has been occurring for years) accelerated during the pandemic. Many potential sellers have held homes off the market because of risks associated with COVID-19. Another cause has been the surge in refinance activity. Historically low mortgage rates have been a big incentive for many to refinance their homes into a lower rate instead of putting them on the market.
As illustrated in our monthly Home Sales Reports, Virginia currently has only 1/3 of the inventory we had just five years ago. According to Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD, “That number doesn’t even tell the whole story. A significant portion of the available inventory is made up of homes that have been on the market for a year or more—properties that are, for various reasons, more difficult to sell.” This available inventory also includes a greater number of homes that are on the lower-priced end of the spectrum.
So, how can a REALTOR® best advise buyers in this tricky environment?
- Tip #1) Encourage your buyers to be flexible. Particularly now that many workers have the option to telework, and may even have this option once the pandemic has ended, they may want to consider widening their area of search, looking for new neighborhoods that appeal to them. Without having to deal with a daily commute, they may be open to more communities a bit further out that they hadn’t previously considered.
- Tip #2) Make sure your buyers are READY TO GO. Buyers needs to get their pre-qualification done by a lender before they begin their house hunt. Not completing this step could take their offer on a home out of consideration. ALSO, remember that lenders are experiencing significant delays because of the high current buyer demand. In a competitive market, lenders are slammed, and buyers may have to go in a queue.
- Tip #3) Your buyers may want to consider becoming short-term renters. Selling their current home now would get rid of the contingency issue when they make an offer on another home, and they might also reap the benefits of the current sellers’ market! Moving into a rental property for the short-term could make them more competitive as buyers.
Check out ALL of our stories in the “New Challenges for Buyers” series here:
Do you have a specific buyer’s challenge you’d like us to address in this series? If so, please reach out to Robin Spensieri at firstname.lastname@example.org to share your idea.