Home buyers are being caught off guard by stiff competition as they try to buy their dream home. This is happening across the country as well as in our greater Sacramento real estate market.
For what seems like forever, buyers have been able to take their time, make low bids and have the upper hand in negotiations with sellers when buying homes. All this has changed and, this sprint, buyers are more than surprised. Now they must be prepared to make offers quickly, may have to bid over the asking price and are being advised to write letters to the sellers to differentiate themselves.
The rapid change in the Sacramento housing market is difficult to explain to clients and it is not uncommon to lose several homes before the new environment is fully recognized. It is a painful process for many buyers and their agents.
We listed two homes in the last few weeks. Both are short sales and priced under $300,000. The listing in Folsom was only on the market for 3-days and received 25 offers with prices ranging up to 115 percent of the asking price. The Sacramento listing in Natomas went as fast and had eight offers with seven offering over the asking price. For the listing agent, this creates busy work but is nice. For the selling agent and their clients it is time consuming and frustrating. Many agents who called us about one of the two listing I mentioned above said things like, ‘This is our 4th offer and we have been outbid on all of them.’
Why is the Sacramento real estate market becoming so competitive? As with other markets we are seeing a decrease in the number of homes for sale and it is happening during the traditional spring selling season. Some experts believe, with the loss of value, many homeowners who might like to sell are holding back and hoping to see some price increases in the next year. In addition we have been seeing more investors trying to buy homes.
The National Association of REALOTRS® reported late last week pending homes sales in March reached their highest level in nearly two years and are up 12.8 percent from a year ago.
