If you’re looking to purchase a home in Massachusetts, you may have heard of several challenges that today’s buyers are facing; but do you know exactly how the market has changed, and what to do about it? The tips below offer both trends of which you should be aware, and the means through which you can better navigate today’s housing market.
Look at the numbers
According to the Massachusetts Association of Realtors, over the past three years alone, the number of homes for sale in Massachusetts has gone down by nearly 30% — a staggering number for a market that was already approaching an all-time low several years ago. At the same time, the median sales prices have been increasing significantly, inching over $400,000 for a single family home last June, and approaching $390,000 for a condominium this past March.
Know how these numbers affect buyers
As a result of the low inventory in Massachusetts, sellers are pricing their homes to be extremely competitive, and buyers are taking risks to stand above the competition. In many instances, sellers are pricing their home slightly below market value in order to start bidding wars, which, in turn, drive the sale price up substantially. Because buyers are in a “seller’s market,” they are willing to take risks that make them more attractive to the seller, like offers above market value, waiving inspections, and waiving the financing contingency.
Research your specific market and make a plan
Before you start browsing online, look into what has been sold in your desired neighborhood in the past year and note any price trends. Explore how the seasons, locations, and certain features are affecting prices, and determine if you would prefer to buy now or wait until the fall/ winter when both inventory and prices may be lower. The research you do will not only help ensure that you’re selecting the right time to buy, but will also allow you to determine how you want to price your home (if you’re planning to sell at the same time).
Give yourself boundaries
Because the market is so competitive, it can be helpful to outline the prices and terms that you are not willing to go beyond while you still have a clear head. For example, are you financially stable enough to offer to waive a financing contingency? Is there a price at which you could provide an all-cash offer? Are you willing to waive an inspection contingency on an older home? Exploring all of these options before you find that “dream home” that you would do “anything” for can help you avoid putting yourself in a precarious position.
Find the right team
In order to find the right home, on the right terms, you don’t just need a real estate agent, you need a team of people that includes an agent, a mortgage broker, a real estate attorney, and any other trusted advisors that you know in the market. All of these people can help you determine what terms will be feasible in your specific situation, and can guide you through the processes of negotiating and closing.