With homes selling at a record pace in the 2nd quarter of the year, buyers are frustrated with being outbid
The Upstate is not the only market seeing a record-breaking demand and homes in short supply triggering bidding wars, the same scenario is playing out in all markets across the country.
The demand is so intense that we see homes sell within a day of hitting the market. It is crazy.
In Greenville real estate, we see homes regularly selling over listing price. We see homebuyers getting outbid on homes. Bidding wars are now the norm. Strategies like waiving inspections to secure deals are popping up in places in the greater Greenville area. New listings get snatched up right away.
Why is the market so hot?
The demand for homes is fueled by record-low mortgage rates, people looking for bigger houses, and millennials entering their home-buying years. It doesn’t help that these home buyers compete for a small number of houses on the market.
The Greenville area’s MLS, when the market is not in frenzy, should show somewhere between 7,000 and 8,000 homes on the market. But in February of this year, according to GGAR, the number of homes for sale was 3,009.
Home buyers are priced out of the market
It’s a great time to sell a house for home sellers but a frustrating time to buy for home buyers.
In hot neighborhoods around Greenville, single-family houses are selling quickly, often with multiple bids driving up the price. In some cases, a four-bedroom house in Simpsonville recently drew 24 offers. In this hot market, many home buyers are being out-priced out of the current home market.
According to 2021 estimates from the National Association of Home Builders (NAHB), roughly 60 percent of U.S. households are effectively priced out of the market.
The median price of a home in the greater Greenville area has gone up by $20,000 or about 10 percent, according to figures from the Multiple Listing Service. The median price has increased by about $10,000 a year since 2015. Monthly averages show that homes sold in February were up $25,000 more than homes sold a year ago, according to GGAR.
Homes are getting more expensive by the year and homebuyers are left with paying more than they were last year.
Is it a great time to buy?
If you are trying to buy a house in the greater Greenville hot market, prepare for battle. Bidding wars are common these days as buyers are eager to take advantage of low mortgage rates and there are not enough homes on the market. The competition will be fierced.
What can home buyers do?
Get preapproved for your mortgage – It shows the seller that you’re a serious homebuyer and that you can secure a mortgage, a mortgage pre-approval also lends you some flexibility in terms of bargaining and negotiations.
Work with a buyer’s agent – When you work with a buyer’s agent you can have access to deeper data than you can find on the internet regarding recent and comparable sales, houses coming on the market, outcomes of recent bidding wars, and more.
Adjust your budget – If homes are selling above asking price in a neighborhood you like, you would want to consider adjusting your budget so you can compete in a bidding war.
Act fast – Some listings can get under contract within 24 hours, you must act fast when you find a home you like. See the house in person as soon as possible.
Consider an escalation clause – an escalation clause allows you to increase your suggested purchase price in order to avoid getting outbid. Your agent can structure an “escalation bid” that automatically increases your offer in set increments over the highest offer — by $5,000, for instance — to a maximum price.
Submit a large earnest money deposit – You’ll show the seller that you’re serious about closing if you increase your earnest money deposit above normal. You’re only offering the seller the money now rather than later, and it speaks volumes.
Give the sellers time to move – Offer sellers time to move out after closing without expecting compensation. This is a good offer if the sellers are also selling and buying simultaneously.