This sponsored, biweekly Q&A column is written by Andrew Goodman, broker/owner of Goodman, Realtors. Based in Bethesda, Andrew serves clients in Maryland, D.C., and Northern Virginia. Please submit comments, questions, and opinions in the comments section or via email.
Question: What can you tell us about the current real estate market?
“If you are going to buy, be prepared to pay. If you are going to sell, be prepared to move.”
Right now, the Bethesda real estate market is extremely hot and for many reasons. This year alone there have been a total of 14 single family homes sold. On average, those homes have sold in eight days.
There have also been eight condos sold in 2014, and on average they have also sold in eight days. There are many factors that have led to this. Here are some of the most influential ones:
Lack of Inventory: There are very few properties on the market, plain and simple. So, when you have multiple buyers trying to purchase/move, you tend see properties fly off of the market as well as the increasing prices.
This is your typical low supply vs. high demand scenario. Now, as mentioned in my last column, there are going to be a few homes out there that do not fit the norm and sit on the market for a while. That is primarily due to those homes being overpriced. If the home is priced right, it is going to sell and in this market, may even have multiple offers to trigger a bidding war.
High Demand: Buyers are out there trying to snatch up anything and everything they can. Interest rates are still relatively low and buyers see an urgency to purchase before those interest rates increase. I tend to agree with them. However, when you have so much demand and so few homes on the market, the potential for a bidding war increases. The current market feels like the days of the “bubble” with one major difference: Appraisers must follow stricter guidelines when appraising a home.
When a seller is ready to list his or her home, they should make sure to take a look at the current inventory so they know what the buyers will be comparing their home to.
Sellers, be ready for a ton of showings in the first two weeks (if your home lasts on the market that long). If your home has been on the market for two weeks and has not sold, strongly consider reducing the price. If your home is priced well, you should receive an offer very quickly and may even receive multiple offers.
If you are currently looking to purchase a home, be sure to be pre-qualified with a lender prior to jumping in to the market place.
If not, you will almost certainly lose in a bidding war. Try to limit as many contingencies as possible and potentially be ready spend more than the list price.
Now keep in mind, not all sellers are about the dollar (believe it or not). Since appraisers have been so tough appraising homes, many sellers want to see stronger terms rather than an unrealistic high offer price. Try to limit contingencies, increase deposit amount, increase your down-payment, etc., along with increasing your offer price.
Appraisers are not going to allow ridiculous escalations to come into play, which would ultimately lead to the seller dropping the sales price to the appraised value or requiring the buyer to come up with the cash to cover the difference in value.
Many of my clients have heard this from me: The Super Bowl is like a little real estate holiday.
For one reason or another, it is right around the Super Bowl when we tend to see more and more homes hit the market. That has been true for this year as well.
However, I believe our above average amount of wintry weather has limited sellers’ belief that buyers will actually purchase.
If you are ready to sell, put your home on the market. Buyers are willing to buy no matter what the weather conditions are like. For instance, we got five inches of snow on Monday and I had three clients call me to show them homes since they are off work!
As mentioned previously, when listing a home for sale, put your best foot forward and be realistic with your list price and you will receive better results than trying to push the envelop and overprice your home.