Currently in the US, the majority of the housing market is a Seller’s market. Home prices are rising and inventory is tight, meaning there are not enough houses on the market for buyers. We also know that it is a seller’s market because the “DOM”, (days on the market), are very short, often less than 10 days.  In a lot of areas, the final sales price is exceeding the list price.Here are a few factors that are contributing to a “Seller’s market”:

  • Population growth– When there is an influx of people moving to a town or a specific area, the demand for housing usually exceeds the supply.  This is certainly true for the Lake Country area.  There are many people moving here from the Chicago and Milwaukee area.
  • Job Growth– Whenever a new company moves into an area we see new demand for housing because of the new employees moving into the area.
  • Housing starts– One of the causes of the shortage of homes is that construction costs are continuing to rise dramatically.  Lumber prices have increased by 25% over the last year. There is also a labor shortage in the residential construction industry so that in some cases it has been cost prohibitive for builders to build.

Buying a house in a Seller’s Market:  In order for a buyer to compete in a seller’s market you need to be prepared. Step #1 is to find a lender.  It is probably a good idea to work with a local banker or lending institution because it is important that the lender is familiar with the rules and regulations that apply to the area. You also might want to consider waiving some of the contingencies that you normally would include in the offer. For example, if the house looks to be in good shape, perhaps skip the inspection.  Or, if at all possible, pay cash instead of getting a loan.  Cash is always, “king”.  Other ideas would be to increase the amount of earnest money, use an “accelerator clause” in the offer, or offer more than the asking price.  That being said, if you need a loan, you’re taking a chance that it won’t appraise out if your offer price is too high.

If you’re thinking that this sounds very stressful, don’t worry!  Call Stapleton Realty and one of our real estate professionals will help you navigate through the process.