Buyer Anxiety Surges-No End In Sight For Feeding Frenzy
Rising rates of over 1 full percentage point for 30-year fixed rate are driving would-be fence sitting buyers into the Spring market. These first time home buyers are in for a shock, as there are barely any homes on the market, perhaps one home for every three buyers.
In Lincoln Park for example, there were 95 single family homes for last sale last Spring, and now only 39. This is true for Lincoln Park condos, 240 are available versus 415 last year. There are lots of Chicago neighborhoods, but we look at Lincoln Park as a bellweather: it has the brand name cache for relocating buyers, it is near the lake and super walkable, and it always has the most buy/sell transactions. If you look at other areas, you will see similar figures. Heck, I have a buyer in Plainfield/Oswego and the housing shortage is the same situation as the city.
For sellers, it is a great time to go to market even if your home needs a little cosmetic work. Of course, you then might need to buy your own home at a higher interest rate and deal with the buyer situation.
The Current Situation for Buyers
Expect lots of open houses, instead of private showings during the week. A cattle call, so to speak, where the open house might be Saturday then highest and best offers due at noon on Sunday. Your offer should be over list price, at or over 20% down, and you should be willing to accept the home as-is. Even then, you might be in the final round and your offer still not accepted.
I have never seen anything like this in 20 years, but this too shall pass. Until then, make sure you have a great agent in your corner with tons of experience. Often times, it is the phone call from the list agent to the buyer’s agent that seals the deal!