As we move into the spring homebuying season, one thing remains clear—the market will remain red hot in many areas throughout the region.
Low interest rates are expected to remain for the foreseeable future that, combined with an inventory crunch, will make house hunting increasingly competitive for homebuyers and their realtors. In some areas, there have been reports of multiple, excellent offers within hours of a home going on the market.
Adding to the pressure is rising prices that in some areas may be squeezing middle class homebuyers out of the market. According to a new WSFS Mortgage survey of Delaware and Greater Philadelphia residents, more than two-thirds (69%) of respondents are concerned this is already happening.
If you are planning to buy a new home this year, keep these considerations in mind as you not only map out where you want to be, but how you will get there.
Be Prepared and Nimble
The housing inventory crunch has largely been fueled by COVID-19’s impact on buyers’ behavior, with 69% of the WSFS Mortgage study respondents saying the pandemic plays a role in finding a better house that fits their needs. In fact, 55% want to buy a different house in case there is another pandemic in the future.
This uncertainty has led to home, work and lifestyle changes that are shaping the way we live, whether it is a need for more space or a desire to live in a less expensive area. Recent data shows that metro Philadelphia is the top choice for New Yorkers to relocate to due to lower homeownership and rent costs. This phenomenon has added even more players to the fierce competition for homes.
What can you do? First, work with your bank and mortgage lender, preferably those with low rates and fees and who know the local market, to prepare your finances so you can be as attractive a buyer as possible. Mortgages can take up to 90 days to close due to the volume lenders are experiencing, so make sure your budget and finances are in peak standing throughout the process. Then, work with a realtor who is nimble enough to find multiple, realistic options for homes that meet your needs within your price range.
There likely will be multiple offers, so negotiations are unlikely. Make your first offer your best offer, and don’t be discouraged if you miss out the first couple times.
Be Open Minded
The common phrase “location, location, location” still holds true in the current residential real estate market.
However, with inventory in some areas not meeting demand, you may need to take a closer look at unfamiliar areas that still have plenty to offer. Make sure you don’t limit yourself either. With rates so low, you may be able to afford more than you previously thought.
The WSFS study found that 45% of respondents interested in buying a home in 2021 want to buy in the suburban Pennsylvania counties, including 69% of current suburban residents, while 72% of New Jersey and 77% of Delaware residents plan to stay in their respective states, indicating continued inventory shortages throughout the region.
Research communities throughout the area you are interested in and give yourself multiple options that meet your needs—locking into one specific area may be prohibitive in finding a home you want.
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