By now, most people have either heard or read about today’s real estate market.
Sellers are often receiving thousands more than they’re asking for; buyers are forking over much more than they intended. Young couples can’t find their dream home, and, if they do, they’re out-bid for it.
Plus, the available inventory is dwindling. According to one report, close to 3,500 homes were available at this time two years ago, compared 600 or so now.
The key word for buyers, it seems, is patience.
According to local Re/Max Realtor Mark Ryerson, although 56 percent of listed homes sell above the listed price now, 22 percent sell at the listed price and 22 percent below the listed price.
He and his wife, Susan, work together for a Re/Max broker.
“The overall issue,” said Susan — a Realtor for eight years — “is there’s a higher demand than supply.”
“More homeowners are deciding to put their homes on the market, encouraged by vaccines, a stronger economy and low mortgage rates,” says realtor.com Senior Economist George Ratiu. “What this means is buyers will have more choices at more affordable prices.”
They don’t even have to see homes in person, thanks to technology and the internet: People from out of state can see homes hundreds of miles away, and, thanks to drones, can view everything in the immediate area — from the shingles on the roof to the front and backs yards, and even how the neighborhood appears from above.
Nationally, homes are selling faster, lasting just 35 days on the market on average. That’s two days shorter than in June 2020, according to the website.
Across the U.S., new listings of homes for sale increased 10.9 percent in June, compared to May, and were up 5.5 percent thus far in 2021. But, according to realtor.com, the number of homes for sale was down 43.1 percent from June 2020, when the nation reeling from a housing shortage.
With that limited supply, it’s hopeful homebuilders will provide a much-needed boost of inventory to help meet buyer demand. With increasing material — lumber, concrete, PVC, trusses, etc. — and labor costs, along with supply chain challenges, higher construction costs are the result, and the builders pass those costs to homebuyers.
Builders are also limiting inventory by phasing in sections of developments. For example, in a 100-lot subdivision, the builder may only offer 25 lots in one section, rather than making all 100 lots available to homebuyers.
Fewer homes for sale has meant median list prices increasing by almost 13 percent — year over year —to reach $385,000, according to realtor.com. And although the prices have risen, the rate of actual price growth has slowed.
For example, in May, prices nationally were 15.2 percent higher than in May 2020. In the Albuquerque Metro Area, according to the Greater Albuquerque Association of Realtors (GAAR), the average increase between May 2020 and May 2021 was 26.3 percent.
According to GAAR, the overall inventory of detached homes, defined as single-family, for sale decreased 62.6 percent to 291.
“2005 was the previous record till last year,” said Re/Max broker Linn Reece in an interview at his Northeast Albuquerque office, where Rio Rancho Public Schools Board of Education member Catherine Cullen is a Realtor.
“There’s a constant ebb and flow,” in a seven- to nine-year cycle, Reece said.
According to GAAR’s “monthly indicators” detailing May, the national housing market “shows little sign of cooling. Robust buyer demand, fueled by low mortgage rates, continues to outpace supply, which remains near historic lows.”
Homes that averaged 23 days till sold in May 2020 were being sold an average of 13 days after listing this past May.
The buyers’ market has grown, Reece noted, as Millennials are deciding it’s time for them to own rather than rent.
But he also noted fewer homes to choose from: May’s “inventory” of single-family homes for sale was 691 —“You don’t even get a second chance,” Cullen said, having witnessed the disappointment of losing bidders. “I really feel sorry for them.”
Buyers can offer cash and waive some of the “extras,” such as an appraisal and an inspection, costs normally passed along to the seller.
Susan Ryerson said she recalled one buyer submitting eight bids before finally getting the home.
“We don’t want any of our buyers to ‘settle,’ and not get something they don’t love, and we don’t want them to over-pay too much,” she said.
She noted she was aware of one buyer in Los Alamos overpaying $100,000 on a home.
“(In) Rio Rancho, prices are still fair to buyers,” she added. “Obviously, we’re not like Seattle, where you’re paying double for a house.”
And thus, as Cullen advises: “Don’t give up.”
“People are finding homes — they’re not all going above list price,” she said, echoing Susan Ryerson’s advice: “Be patient; don’t get discouraged.”