There have been few markets that have been as competitive as the current housing market. The combination of historically low-interest rates and a lack of inventory has made buying a home quite difficult.
If you’re in the market to buy a home in Colorado, you may be struggling to find the right property. Knowing how to navigate the market is essential to getting your offer accepted.
Whether you are a first-time buyer or a seasoned veteran, you can do a few things to improve your chances of success in finding – and buying – your dream home. In this article, we will discuss a few key tips to help you buy a home in this competitive market.
Why Is The Market So Competitive?
After emerging from the COVID-19 pandemic, few imagined how wild the housing market would become.
A perfect storm of historically low-interest rates and a lack of inventory has created a situation where homes are selling fast – often with multiple offers.
This has made finding and buying a home quite tricky, especially for first-time buyers or those who are not familiar with the ins and outs of the market.
1. Inventory Remains Low
The combination of people wanting to move out of urban areas and the pandemic causing a decrease in new construction has resulted in historically low inventory levels.
This has caused prices to rise and homes to sell fast – often with multiple offers.
2. Interest Rates Are at Historic Lows (But Rising)
Interest rates play a huge role in the housing market. The lower the interest rate, the more affordable a home becomes.
Currently, rates are rising, which may help slow the hot market. However, this impact will take time, with many experts predicting that home prices will remain high as rates rise.
3. More Buyers Than Sellers
The current situation has resulted in more buyers than sellers in the market. In a typical market, there are about six months of inventory.
This means that it would take about six months to sell all the homes on the market at the current rate of sales.
The current market has less than two months of inventory, meaning homes are selling fast – often with multiple offers.
4. First-Time Buyers Are Struggling
First-time buyers are struggling the most in this market. They are competing against all-cash buyers, investors, and those who are upsizing or downsizing.
The lack of inventory and the rise in prices have made it difficult for first-time buyers to find a home that meets their needs and budget.
5. Prices Are Rising
The combination of low inventory and high demand has resulted in prices rising at a rapid pace. Home values are predicted to continue to rise as we move into 2021.
This is good news for sellers but bad news for buyers, as it makes it even more difficult to find an affordable home.
Tips to Help You Buy a Home in This Competitive Market
If you’re looking to buy a home in this competitive market, you can do a few things to improve your chances of success.
1. Get Pre-Approved for a Mortgage
One of the best things you can do is get pre-approved for a mortgage. This will give you a clear idea of how much you can afford to spend on a home.
It will also show sellers that you are a serious buyer who is ready to move forward with a purchase.
2. Work with an Experienced Realtor
Working with an experienced realtor who knows the market is essential. They will be able to help you navigate the market and find homes that meet your needs.
They will also be able to help you put together a competitive offer that has a better chance of being accepted. Plus, with an insider’s knowledge of the market, your realtor will be able to help you avoid overpaying for your home.
3. Be Flexible
In this market, it is essential to be flexible. You may not be able to find a home that meets all of your criteria, so you may have to compromise on some things.
It is critical to have a clear idea of your must-haves and be willing to let go of some of the things that are not as important. This can range from the type of home you’re looking for to the neighborhood you want to live in.
If you are willing to be flexible, you will have a better chance of finding a home that meets your needs.
4. Be Prepared to Act Fast
In this market, homes are selling fast. You may find a home that you love and need to make an offer immediately.
It is important to be prepared to act quickly when you find a home you’re interested in. This means having your financing in place and being ready to move forward with the purchase.
5. Increase Your Down Payment
Increasing your down payment can help you succeed in this market if you’re able to. A larger down payment shows sellers that you are serious about the purchase and can help you win a bidding war.
The better your financing, the better your chances of being able to buy the home you want.
6. Be Realistic about Your Budget
It is important to be realistic about your budget in this market. With prices rising, you may need to adjust your budget to account for the increase.
If you are not realistic about your budget, you may overspend on your home and end up with financial problems down the road.
7. Have a Contingency Plan
It is always a good idea to have a contingency plan in place when buying a home. This is especially true in this competitive market.
There are many things that can go wrong when buying a home, so it is crucial to be prepared for anything.
For example, your financing may fall through or the home may not appraise for the purchase price. If you have a contingency plan in place, you will be able to deal with these problems if they arise.
8. Be patient
Last but not least, it is important to be patient when buying a home in this market. It may take some time to find the right home, but it will be worth it in the end.
If you are patient and persistent, you will eventually find the perfect home for you and your family.
Peak State Properties Can Help You Find Your Colorado Home
As you can see, finding and buying a home in this market can be a challenge. But, it is not impossible.
If you follow these tips, you will improve your chances of success.
When finding the perfect home in Colorado, look no further than Peak State Properties.
Our team of experienced realtors will help you navigate the market and find a home that meets your needs. We will also help you put together a competitive offer and avoid overpaying for your home.
Contact us today to learn more about how we can help you buy a home in this competitive market. We will work with you every step of the way to make sure you find your dream home.