It’s no secret: the real estate outlook for summer 2018 is definitely shaping up to be a seller’s market. In the Rochester, MN area alone, the median listing price has increased 11%, while the number of active listings has simultaneously decreased from last year at this time (realtor.com, 2018). This low supply of housing likely won’t be able to keep up with demand this year—and because of it, houses are priced higher and selling faster. In a seller’s market, buyer fatigue is a real frustration. But what is buyer fatigue, and how can you avoid it with tight inventory? Read on to hear our best tips.
Let’s go back to basics: What is buyer fatigue?
Buyer fatigue is what we call the effect on buyers in competitive market conditions where sellers can essentially command the market. It’s emotionally draining for a potential buyer to find, make an offer, then be rejected on the perfect home over and over. Potential buyers, especially those just entering the market or looking for more affordable options, are getting worn out from having so few options in a competitive seller’s market like this one.
What makes a seller’s market?
Essentially, houses are in tight supply nationwide. For example, a balanced housing market is considered to have six months of supply—and in December 2017, the market had less than three months of supply, and homes were selling five days faster than the year before (CNN Money, 2018). This tight supply is causing a shortage particularly in the affordable housing range—considered mid-market to starter homes around $300,000 and under. Because housing supply is low and demand is high, you’ll have a much easier time selling in this market than buying.
How do you navigate this market as a buyer?
The best defense you can have against buyer fatigue is by coming in with the right expectations. Our advice is to choose a trusted real estate professional to walk you through the house buying process. They will help you set realistic expectations for the type of house you can afford that suits your core needs. As a buyer in today’s market, the real estate partner you choose throughout this process is more important today than ever before.
If you’re looking to purchase a home in the near future, remember that a trusted and experienced realtor will always do their best to walk through as many options as possible for your unique situation. A realtor might suggest unconventional financing for first-time homebuyers, those with past credit issues, the self-employed or low income. With non-traditional home financing options, buyers don’t necessarily have to pay the customary 20% down payment. Your realtor should be your trusted advisor on the best options for you in your route to homeownership—no matter what kind of market.
If you’re starting the home buying or selling process or have questions on how the market will affect your search, we’d love to help you get started. Contact us today.