Spring-ish Market Update
With the real estate market starting earlier this year (January!), most people don’t consider that spring in Wisconsin. The real estate market typically starts around February to March, but the rhythm the past few years has been that the market is starting earlier and earlier due to low inventory.
We normally have around 1 month of inventory in most price ranges, but this year we are under a week's worth of inventory! This places even more pressure on buyers looking to find the right home to buy. Seller’s market is very present and should be considered when pricing and creating a sound strategy in putting your home on the market.
Something else that we talk a lot about in our team and to our clients, is setting expectations for our seller and buyer clients. Right now buyers are competing with 15-20 offers under $300,000, 5-10 offers under $400,000 and $500,000-$600,000 we are getting 1-3 offers. This is location specific and sometimes those numbers are more or less depending on location in and around Madison.
What does this do for pricing and negotiations for buyers? Right now the market is pushing 5-10% more in price above the list price. Also, we are seeing buffers on inspections, radon testing and adjusted appraisal language if it is even added to the contract. We consult with our clients to make sure there is as little in the contract as possible to make it clean and easy for the seller to accept your offer. Other items that we talk about are doing full market summaries for our buyers to show what pricing and inventories are now, plus discuss what is relevant to them based on their comfort and availability to accommodate the terms we are seeing to win the accepted offer.
The images below show just a snapshot of what we are seeing in and around Madison. If there is a specific area or neighborhood you would like more information on, just ask! (email our team firstname.lastname@example.org).
Financing is also a really important step. Local banks have an advantage over large national banks for a couple of reasons. For one they have programs that we call “platinum approval”. This approval is a fully underwritten loan commitment. Typically they just need the accepted offer and then the loan gets approved in as little as 7-12 days. This is the same amount of time as cash letters so it makes you really competitive.
There are several other strategies depending on your situation. We are happy, at no obligation, to consult you through that process.
To keep prepared for our clients, our team stays on top of this all with weekly team meetings, discussion inventory, offer scenarios, tips on negotiating with role playing, etc so that we are prepared with how to help our clients the best way possible. We love to help our people and strategize on ways to make them most successful in a way that they feel comfortable. If it isn’t something that works for our client, we won’t suggest competing as we never want our clients to feel pressured or committed to something that they are not comfortable with accepting.
The market will continue to add inventory but we also know from normal market cycles that more buyers come out to compete. This is a market that an expert will help you get ready to make the best offer you can to win that house!