How to Navigate a Low Inventory Market as a Buyer

For almost two years, sellers have been on the winning side of the real estate market, and everyone has a tale to tell of housing shortages and intense bidding wars. Buyers cannot help feeling demoralized in an atmosphere like that, so if you are looking for Port Royal real estate or wishing you could find an Old Naples home for sale, it’s time to change up your strategy.  Here are some tips to optimize your home search in this seemingly crazy market.

Know the market trends

Rumors abound as to what is coming in the real estate world, both nationally and locally. Each market carries unique attributes, so it is important to be informed about what is happening in both the local and larger markets. In the greater Naples area, the current average list price for a home is $795,000, a 24% increase over this same time last year. Listing prices reached their peak in April at $830,000 and have slowly decreased over the summer months. Remember that these statistics are for the entire metropolitan area, so when you are looking specifically for luxurious Old Naples homes for sale or historic Port Royal real estate, the market movements should look similar, but at higher price points.
Much has been in the news lately about the impact of federal interest rate hikes and rising inflation. Interest rates have an impact on the number of houses being listed and the number of buyers willing to purchase new homes. Effectively, interest rate increases help to bring a skewed market back into equilibrium, which is evident in the falling prices of new listings. Analysts warn us that changing interest rates, after the initial reaction to the news, impact the market gradually, with the full effects not being observed for up to a year.

Find the hidden gems

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Your knowledgeable real estate agent can help you access many more resources for potential homes than just what is available on the published MLS. Homes that were once on the market but whose listings have expired or were withdrawn are a great source to tap into. By learning why they withdrew their home from the market, you may find someone who is willing to sell and to do so at a better price than they originally listed. Homes that are in danger of going into foreclosure are also full of potential. Families in distress and unable to afford their mortgage any longer will be eager to get rid of this liability. Also be willing to speak with those whose homes are for sale by owner. They can often be overlooked because they tend to lack the glossy marketing that agents use. High-volume agents typically know of those whose houses are not listed for sale, but who would become willing to sell their home if the price was right. Be sure to inquire about prospective sellers whose homes may be just what you were looking for.

Get to know home builders

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Because of the nature of planning and permitting, home builders typically know of new developments that are coming long before the development actually begins. They also may have an inventory of homes that are not listed on the MLS that they would like to sell quickly in order to fund future development. Getting to know and building good rapport with home builders may help you find helpful resources- or even your new home.
Additionally, upon seeing the builder’s work, you may decide that working with him to build your own new home is more appealing than compromising your standards as you select from houses that are not really what you are looking for.

Choose the unexpected allies

Networking outside of the real estate industry may prove helpful to you as well.  Two professions in particular- attorneys and bankers- may know about new residential inventory well before it is listed with an agent. Attorneys work with clients to settle wills, divorces, and other painful aspects of life that often necessitate the selling of property. These people are likely talking to their attorneys about the process long before they get in contact with a real estate agent. Bankers know when their clients default on loans and often get stuck with properties when people cannot afford their mortgages. In both cases, there is a desire to sell and generate income, so as a willing buyer, you can meet a legitimate and timely need.

Be flexible

When inventory is low, and you need to buy quickly, it becomes necessary to make some concessions. Prioritize the features of a home, such as location or number of bedrooms, that are non-negotiables for you. Continue to maintain a wishlist of what you want in your new home, but hold on to that wishlist loosely. On all items that you can live without, be willing to negotiate and compromise. A little flexibility, a little imagination (and acquaintance with a skilled handyman) will dramatically expand the new home options that could work for your family.

Play the long game

If you have the luxury of taking your time in finding a new home, be patient. Even if inventory is slower to come onto the market and there are less options, don’t get into such a rush to finish the process that you buy a house you will regret later. Take your time, and be willing to wait for the right property to come along. Remember, change is coming to the economy and the dramatic sellers’ market will stabilize, as has been proven time and again through previous market trends.

Stand out from the crowd

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When you’re in competition with many other prospective buyers out there, it helps to make your offer memorable. If you love a house you’ve seen and want to make sure you don’t lose it to the competition, try some (or all) of these tactics. First, if you have the means to make a cash offer for the house, do it. Where there are multiple offers in hand, the sellers almost always choose the buyers who can pay in cash. Learn about the seller’s needs and be willing to help meet those needs. For example, does she need some time to stay in this house while a new home is being built? Agree to a closing date farther down the road. Be willing to take the lion’s share of closing costs.
One additional touch that will endear your family to the seller is the personal connection. Share, in a heartfelt letter, what you love about the property, how you envision your family’s new life in this home, and wish the seller the best in his new season of life. For most people, there is a deep attachment to home, and they want to leave it in good hands with another family who will love and appreciate it as they have. It should be noted that you should always consult your real estate agent before writing a letter like this to ensure that it will help your case rather than hurt it.

Make a plan

In order to successfully navigate this low inventory market, you need the experience and expertise of a real estate agent with a strong community network and deep understanding of all buying opportunities among Port Royal real estate and Old Naples homes for sale. Robyn Pfister Griffin and Robert Forbis brings a lifetime of knowledge of Naples and a proven track record for excellent real estate performance and client relationships. He will gladly help you navigate through every facet of the process to find your new home. Give Robert a call today at (239) 777-7866.

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