Like any other market, the real estate market is the interplay between supply and demand. Real estate markets vary widely depending on the area. In the Bay Area for example, inventory is currently low and demand is sky high. That means buyers are having to make some sacrifices when it comes to their search and the house they ultimately buy.
So lets take a minute to talk about managing expectations in a competitive buyers market. The question buyers are going to have to ask themselves is: where am I going to give?
When inventory is low or there aren’t a lot of homes that meet all of a buyer’s criteria, one of two things (if not both) has to give: location or condition of the home. Let’s start with location. Buyers hate to give on this one. Sure it would be great to live within walking distance to a favorite coffee shop, local park and less than a mile from a train stop, but guess what? Everyone else wants that too. Homes close to “stuff” are usually more expensive because walkability has become an increasingly in-demand characteristic across all demographics. In our opinion, close to “stuff” is a nice to have, not a must have. The main factor dictating location should be how much homes in a specific area are selling for. If most homes are not in a buyer’s price range, or they have been repeatedly outbid in a particular neighborhood, it’s time to start searching elsewhere. Buyer’s agents work in the buyer’s best interest, so trust them when they suggest a house in unknown territory. Flexibility will pay off.
The other factor is condition. Again, it would be great to have quartz countertops, lo flow plumbing fixtures, a double vanity and hardwood floors. But does anyone need those things? The house that still has shag carpet, linoleum floors & paisley wallpaper, but has been loved and well taken care of. Buyers can make the updates, over time, and build the equity versus paying a premium for the updates made before the purchase.
When it comes down to it, in a seller’s market, buyers don’t really have a choice. I know that is a tough pill to swallow when we’re spending hundreds of thousands of dollars to buy a house. We just need to bring a heavy dose of patience and open minds.