Posted tagged ‘Difficulty buying a house’

Why am I having trouble buying a house?

March 19, 2012

With the all of the changes that the real estate market has endured throughout the current economic climate, it is imperative that we keep a very close eye on several aspects of the market in order to understand the challenges that buyers and sellers may face.  One of the key factors we analyze is the current inventory of homes for sale.

One of the reasons buyers may be having trouble securing a home is that there are so few properties for sale.  In January of 2012, the Multiple Listing Service reported an inventory level of 2.2 months.  This means that if no new properties came onto the market, and we continued to sell them at the current rate, in 2.2 months there would be no houses left to sell.

At an inventory level of 6 months the market is considered to be in balance and when inventory exceeds 1 year there is considered to be an oversupply. So at 2.2 months, when a property comes onto the market and is priced correctly, it typically sells in a short period of time and usually obtains multiple offers – some of which will be all cash.

If you are currently in the process of looking for a home and if you keep in mind the low level of inventory, this awareness should help you in structuring your offers to increase the chances of them being accepted.  A few important points to consider when structuring your offer:

  1. A good deposit to show you are serious
  2. Full price offers, or in some cases, offers that are above asking price when there appears to be a lot of competition.
  3. Keep your conditions to a minimum

On the other hand, if you have been thinking of selling your property, NOW is an excellent time, as values are increasing and homes are selling quickly!

Don’t forget to keep checking back with us this month as we cover some of the other topics that are vital in today’s real estate market.

Why am I Having Trouble Buying a House?

October 26, 2011

There are several reasons that you might be having trouble buying a house.

1.  Inventory: The inventory of available homes for sale is down to 1.9 months- a level of less than 4 months is considered very low.  This means that if no new available properties come onto the market, at the current rate we sell properties, there would be no inventory remaining after 1.9 months.

2.  Affordability: Merced is one of the most affordable places in the United States with 85% on the affordability index, meaning that 85% of the local population can afford to buy a median priced home.  Therefore, we have significant competition for the small number of homes available for sale.

3.  Multiple Offers: Most properties receive more than 1 offer – a significant number receiving as many as 5 or 6.  In many multiple offer situations, the final sale price exceeds the asking price.

4.  All Cash Offers: Statewide, all cash offers make up approximately 26% of all offers written.  Locally, all cash offers account for approximately 40% of all offers.  Therefore, if you are competing with an all cash offer and you need to secure a loan, this can present an obstacle as many sellers prefer all cash transactions.

With low inventory, lots of competition, multiple offer situations, and competing with all cash offers, in today’s market you need the advice of a real estate professional.

For more information, please do not hesitate to call one of our sales associates in any of our convenient locations:

Merced Sales Office:                                   209-383-2171

Atwater Sales Office:                                  209-358-6429

Commercial Office:                                     209-725-7253

Property Management Office:                209-383-6277