Spring is an especially hectic season in the real estate sector. With tax refunds hitting the bank and many families looking to relocate between semester breaks, the period between April and July accounts for 40 percent of annual home sales.
Sadly, this surge in prospective home buyers could not come at a worse time.
While 2021 saw huge spikes in home price growth, this spring home-buying season is predicted to heat up to an all-time high.
Spring of Subverted Expectations
Going into this year, some speculated that the annual rate of home price growth would start slowing down. The growth rate peaked at 20 percent in August of last year, but now many see this spring surpassing that record.
In a new forecast by Zillow, the year-over-year increase in home costs is set to hit 21.6 percent in May. This problem stems from a continued inventory shortage. While many thought inventory levels would normalize after the hectic housing market impelled by the pandemic, this sadly isn’t the case. Instead, it’s getting worse, and as the spring season approaches, buyer expectations grow bleaker.
Expert Insight
Jason Abalos is an independent Realtor with JPAR. He’s been through this tough market with multiple buyers and speaks of the struggle coming this spring.
“It’s a real shame what’s happening,” Abalos says. “People who’ve been saving up and doing their part for so long find themselves in a situation where they just can’t close on a home. Right now, with the number of buyers I have coming in from California, they bid houses up in the area of $50k to $100K. I saw one in my group that sold $250K over the asking price. I can’t believe what’s going on. You tell local buyers, and they can’t believe it either.”
Abalos’ advice is to find a seller who can sympathize.
“Sometimes it’s all about finding that seller who just might work with you,” Abalos said. “I had one buyer financing on a VA loan. The seller found that out and took the offer over another higher bid on a conventional loan. Turns out, this person was in the military as well.”
Marcus Carter, a Realtor with Coldwell Banker, sat down with Daltxrealestate.com to offer the inside scoop on the spring market.
“No question, this will be a hot sellers’ market,” Carter says. “Going into this spring, we’re looking at a record era of home sales. My advice is to budget smart. Whatever amount you are preapproved for, start looking at homes $50K to $100K less than that. Most people are saying expect to go $50K over, I think it’s going to be more like $100K over in most cases this spring. You have to factor that in.”
No matter what, it’s always important to view your real estate purchase as an investment. Don’t let the stress of spring cloud your judgment for a clear financial future.
