Here’s an update on what’s happening in our local real estate market.
According to real estate coach Brian Buffini, the average number of days it took to sell a home from the beginning of the process to the end was 91 days in 2020. Right now, that number has gone up to 96 days. What’s causing some of these delays?
First of all, buyers are looking at an average of 14 homes before they find one and get their offer accepted. Part of the reason is that they may be looking at four or five homes only to be beaten out by the competition. It could just be that buyers aren’t finding the right homes for them because inventory is so low, but either way, it is taking longer to get through the process.
Once a home is under contract, several things could cause delays. For example, we used to be able to expect the appeal to be returned in a matter of 10 days, but now it’s taking closer to 30 days. Loan underwriters are also experiencing a staff shortage, meaning that it takes longer to get through the loan approval process. Finally, if the buyer is requesting repairs from the seller after an inspection, that could cause a delay too, as it might be difficult to find the parts or the labor to do the repairs. I’ve spoken to painters who are booked three months out, and I imagine that many other industries are going through something similar.
Buyers in today’s market are also concerned about paying above asking price. Several months ago, we were averaging over asking price across the board. In September, we averaged 99.2% of asking price; we’ve dropped down a little, but we’re in a more normalized range now.
Another factor in the delays is that many buyers are waiving inspection contingencies. It scares me that some buyers aren’t having inspections done; even if you don’t ask for repairs, you should still want to know what you’re buying and what shape it’s in.
Now, if you can get enough cash to submit a cash offer on the house, you’ll certainly have the freedom after purchasing to turn around, finance it, and lock in a low mortgage rate. This will give you a huge advantage over competing buyers who have to get a loan. Cash buyers now make up between 20% and 33% of all sales in 2021.
Ultimately, my goal is to sit down with my buyers, educate them about the whole process, and discuss the pros and cons of their situations so that they know exactly what they’re doing. If you’re in the market to buy a home, reach out to me at (432) 774-2965 or email me at JanetJohnson@KW.com. I’d love to help you.