House values are rising – and buyers are feeling the pain.
Buyers in today’s real estate market are increasingly frustrated – property values have risen as low mortgage rates and limited inventory have spurred buyer demand.
In April house prices hit their highest level since 1999. The median sales price last month was a record $ 341,600, according to the National Association of Realtors. This corresponds to an increase of 19% compared to the previous year.
Not only are houses selling for more money, they are also flying off real estate. In April, home sales took an average of 17 days and 88% of homes sold last month had been on the market for less than a month.
This is clearly good news for salespeople who have the upper hand in this scenario. But for buyers it has been a source of deterioration. Many shoppers find that neighborhoods that were within their reach a year ago are now out of the question. And many are outbid by buyers willing to go many thousands over the price to accept an offer.
If you are having trouble navigating your way in today’s real estate market, you may be wondering what your next step should be. Here are some options.
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1. Sit down and wait
The housing stock usually increases in the spring, but it hasn’t happened this year. It might be worth taking a step back from your house search if it has been unsuccessful so far. The inventory may open up in a few months, and when this happens, house prices can fall slightly.
2. Keep searching
When it comes to buying a home in a tough market, persistence can sometimes be the ticket to success. You can decide that despite the challenges you face, you want to keep searching for opportunities to buy. And there’s nothing wrong with that.
3. Change your strategy
If you are looking to buy a home to take advantage of today’s low mortgage rates, you may need to reset your expectations and redesign your search. That could mean looking at an apartment or townhouse when you can’t afford a standalone home. Or it could mean looking into a different neighborhood – perhaps one with fewer amenities, but with property prices better for your budget.
Another option? Partner with another buyer. If you can’t swing a house on your own, see if you have a family member or friend working with you. Granted, there are legal and logistical issues to deal with when buying a house with someone you are not married to, but it’s an option nonetheless.
Today’s real estate market is wonderful for sellers. Not so much for buyers. By continuing your house hunt, you will avoid the trap of buying a home that is over budget. The last thing you want to do is take on too much house and regret it.