Real EstateÂ always has its challenges. When it is doing poorly, buyers are struggling to finance their dream. When news turns positive, like in todayâ€™s market, when even with the market getting healthier by the day, the challenge is now high competition. A shortage of good homes in a market that is primed for buyers leads to intense multiple off situations in nearly every transaction.
â€œWould-be buyers are packing open houses and scrambling to make offers on properties before they are even listed. Bidding wars are erupting. And real estate agents are vying fiercely to represent the few sellers that do exist.Â Housing inventory has sunk to levels not seen since the bubble years. The number of American homes with a "for sale" sign hit 2.5 million in April, the lowest number for an April since 2006, according to the National Assn. of Realtors.â€
The sharp drop in inventory paired with the record low interest rates have proved to be effective in stabilizing some of the hardest hit markets in the US (Southland, Vegas, Phoenix, and Miami). Furthermore, the dreaded wave of foreclosures that was predicted to hit the market with a sucker punch has not yet come and with fewer and fewer borrowers entering default, it is starting to look like it may never materialize.
So on this Friday, exactly halfway through the year, remind yourself even as you struggle through highly stressful and competitive offers, this is a problem of a healthier market compared to where we sat last year.