It’s still a competitive market for homebuyers. In this video, we will review the current state of the market from the perspective of buyers, look at some of the upsides of buying a home now, and discuss strategy for writing a competitive offer.
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Eric Andersen, B.A., M.Div.
Owner/Designated Managing Broker, Eric Andersen Homes
📲 Text/Call: 708.674.6725
📩 Email: eric@eandersenhomes.com
🌎 www.ericandersenhomes.com
I have a number of awards and designations, including:
⭐️ Platinum 2021 Top 1% Sales Award (Mainstreet Organization of REALTORS®)
⭐️ Top 3 REALTOR® in Brookfield, IL (2021)
⭐️ 20 under 40, class of 2021 (Mainstreet Organization of REALTORS®)
⭐️ Gold 2020 Top 3% Sales Award (Mainstreet Organization of REALTORS®)
⭐️ Endorsed Local Provider (RamseyTrusted)
⭐️ Best of Zillow
⭐️ Pricing Strategy Advisor (National Association of REALTORS®)
⭐️ Certified Staging Consultant (Mainstreet Organization of REALTORS®)
Transcript:
Shopping for a home isn’t normally considered an extreme sport, but the past few years have been anything but normal. I’m Eric with Eric Andersen Homes, and I’m still bringing body armor in for every showing, and my life insurance premiums spike every time I write an offer. I called to see what’s happening, and it sounds like the adjusters have put home buying in the same risk category as skydiving. Seems legit. I haven’t seen anything like this since the Beanie Baby craze of the mid-90s. I just had a buyer with solid financing write an as-is offer for almost $20k over asking, and we came in last place. What’s a buyer to do? Home prices have gone up, interest rates have gone up, and I’m getting calls every day from the parents of millennials begging me to find their kids a home so they can finally move out of the basement. But it’s not all bad news for buyers. Inventory is finally starting to creep up, and in a supply and demand economy like real estate, more supply will make for a less cutthroat buying experience. As you can see in the green bars, the supply of homes for sale has been steadily increasing at the national level over the past five months. At the end of July, we saw an 18-month record high of 748,000 homes for sale. The western suburbs of Chicago have followed a similar trend. You can see that supply has been steadily inching up in La Grange, Western Springs, Brookfield, and Riverside. The biggest difference between the local and national data trend is supply is still lower at the local level that it was at the beginning of this year. Either way, more homes for sale is a good thing for buyers. The reason for the increased supply isn’t necessarily because more sellers are moving. It’s more likely due to higher interest rates. And while nobody enjoys paying more in interest, there are some upsides to it. If rates stayed as low as they were,home values would be higher than Martha Stewart at a Snoop Dogg concert. Nobody wants to see that. Moderating home values is good news for buyers, plus you’re likely to have more options and less competition. If that means higher interest rates, so be it. It’s still a sellers’ market for sure, but competition is slightly lower than it was six months ago. So the question for buyers becomes, once you’ve found the perfect home, how much should you offer? As you might have guessed, there is no one-size-fits-all answer. Context is everything. But we do have some data and principles to help guide us. Looking again at La Grange, Western Springs, Brookfield, and Riverside, you can see that the median percent of asking price sellers are receiving is anywhere between 98.6% and 100% of asking price. Of course, some homes are going below 98% and others over asking. The data is just showing us what’s typical in these markets.If a home has been on the market for a while, you can probably get away with a lower offer. If it’s a new listing and there are multiple offers, it’ll probably go well above asking price. An experienced agent who knows the area can help you come up with a competitive offer, and there are other things you can do to strengthen an offer besides just offering more money, though price almost always carries the most weight. In competitive situations, I advise my clients to offer what the home’s worth to them. In other words, compete at your comfort level. That may mean going all out, or it may mean giving a solid-but-not-superhuman effort. That way, if they get it, they’ll be happy, and if they don’t, they won’t have any regrets because they gave it their best shot. So that’s a little about what buyers can expect in the western suburbs right now. Feel free to reach out anytime if you’d like my help! You can find all my contact info in the video description. I’m Eric with Eric Andersen Homes, a family-owned brokerage where we treat our clients like family.