When the pandemic first started, a rush to purchase homes followed. It was a great time to buy—high inventory, lower mortgage rates, and not as many buyers to compete with. As the pandemic went on, this quickly changed. More and more homebuyers transitioned to long-term remote work, and the already limited housing inventory was further impacted by supply and labor shortages.
Now two years later, the market is still very competitive for buyers. A competitive market doesn’t mean an impossible market, though. Read on to learn why homebuying may be more hectic this spring and three ways you can prepare to find a house in this market.
Why will homebuying be more hectic this spring selling season?
Although nothing is set in stone, there are a few factors that may make buying a home this spring more competitive:
If you’ve been looking for a home throughout the pandemic, low inventory is something that you are used to. While inventory is showing signs of a slow comeback, the number of homes listed for sale continues to be low compared to previous years. Fortune reports that as of December this year, there were only 1 million homes listed for sale on Zillow, which is 17.5% down from the inventory in December 2021. Although spring is the peak selling season, which will welcome more houses on the market, buyers will still face limited options and competition from other buyers.
Inflation with home prices
Inflation is impacting nearly all markets right now, including the housing market. Virginia REALTORS® reports that the inflation rate was already at 7% in December, which is the highest rate it had been in decades. Inflation is predicted to drive up the median sales price for homes in Virginia. Virginia REALTORS® predicts that the median home price will rise by 4.1% this year, with a faster growth taking place towards the beginning of the year. This is on top of the increase that already took place in 2021. In 2021, the median sales price had risen in Virginia by 9.4%. For homebuyers that aren’t looking for their forever home (and even for some homebuyers who are), paying an increased price for a home will likely not fit into their long-term plan if they are looking to resell their purchase down the road.
Rising mortgage rates
Mortgage rates are also predicted to rise this year. Virginia REALTORS® has forecasted that mortgage rates may rise to 4% by the end of 2022. Fortunately, this is a relatively small increase. Specifically in Virginia, the difference in mortgage payments will equate to less than a hundred dollars per month in many markets across the state. Regardless, however, higher mortgage rates may cause buyers to reevaluate the size of a home they can afford and their list of “must-haves” for a home.
3 ways to prepare for buying your home this spring
So, how can you prepare for the busy spring season as a homebuyer?
1. Do your research ahead of time
When the market is this competitive, preparation is even more important. The market is catered to decisive buyers, so you will find yourself needing to be proactive and efficient when evaluating homes and making offers. If you end up waiting too long to decide on a home, you may lose it! Some things to research include:
the value of neighboring homes in the area
what the neighborhood has to offer you
school district ratings
other local attractions that may be important to you
2. Partner with your agent as soon as possible
Real estate agents are around for a reason–to help you through the process and land your dream home! Agents have in-depth knowledge about the market, area, and home you are considering. They can also be helpful with price negotiations, especially if you are in the middle of a bidding war. Because choosing an agent or realtor is its own process, the sooner you start researching and vetting agents, the better. If you’re curious about how you should vet your real estate agent, check out our article on it. It’s full of pro tips and common misconceptions to avoid.
Another expert to have on-call is a home inspector. It’s important to not skip the home inspection phase during your buying process. You want to ensure that the AC, insulation, windows, appliances, and more are all working before closing on the home. For tips on how to get the most out of a home inspection, check out
How to Get the Most Out of Your Home Inspection.
3. Have a Verified Approval Letter (VAL) ready to go
Whenever you are in the middle of a competitive housing market, you want to do everything you can to give yourself an edge. That means obtaining a VAL to boost your credibility as a homebuyer and show the seller that your finances are in order. It also indicates that you are a serious buyer, which gives any seller peace of mind.
Whether you are a first-time homebuyer or a veteran, competitive markets are always challenging. At Coldwell Banker Elite, we make this process less stressful. We’ll help you from the early search days all the way through the closing of your dream home.
Schedule an appointment with our team today and let us know how we can help you on your homebuying journey!