June 3, 2018

How to navigate today's hot housing market


Our housing market crossed a threshold in April. For 31 of the past 36 months, there were more sales than the same months of the previous year. And April was another month where the local year-over-year sales growth rate outperformed both the Tennessee and national numbers.

May 2015 is when the local market started the break-nick sales pace we have today. Since then average sales price of a single-family home has increased 6.9%, and inventory is at a record low.

Sales are now absorbing new listings almost as fast as they come on the market. So, there isn't much short-term hope for a better inventory picture.

While numbers for the first full month of the prime home buying and selling seasons will be available in a couple of weeks, forward looking reports show you can expect more of what we've seen so far this year.

Aaron Taylor
2018 NETAR President

All of this begs the question: How can buyers navigate this market for the best deal?

The first step is to get a good Realtor®. In a hot market, you want the best agent you can hire in your corner. Interview until you find one where the chemistry is right. Don’t be afraid to ask tough questions about what they have accomplished and who they worked with. Check their references.  Then, after you've selected one, commit to them that you will work exclusively with them. That's a big deal because agents work on commission. If they don’t secure a sale, they don't get paid, and a good agent puts in a lot of work helping his or her client find and negotiate a deal.

Have your financing locked in before you begin shopping and stay within the limit of how much mortgage you can afford.  This goes to being nimble when it comes time to make an offer. Sellers can sometimes be swayed by a quick closing that is set up by buyers who have already crossed all their t's and dotted the i's.

Everyone has a dream home. Not everyone finds exactly what they want. Confide in your Realtor® about concessions you're willing to make.  It will make the process – and relationship – a lot smoother.

Once you find a home that you're serious about get a pre-inspection. It's not uncommon in hot markets for sellers to reject requests to fix minor problems. A pre-inspection will give you the information and confidence you need to formulate the best offer.

Above all resolve to be patient. Sellers today are getting more offers and have more choices. Don't let a string of rejections grind you down to the point where your offers are too high, or you give in to the temptation of making an offer on something you don't really like.

Despite more competition and a tighter market, there are good buys on the local market, and housing here in Northeast Tennessee is a lot more affordable than it is in other areas. Persistence and a partnership with a professional Realtor® also always pays off in the long run. But how should sellers' dovetail their real estate goals and needs in today's market? Stay turned for that question in next week's column.

Aaron Taylor is the 2018 president of the Northeast Tennessee Association of Realtors. The real estate education and trade group is the voice for real estate in the Tri-Cities and has over 1,200 local Realtor® members and almost 100 affiliates.