It's no secret that the Boston real estate market is on fire right now.
With all of the business development opportunities pouring into the city—alongside the already established education and medical sectors—the Boston housing market has reached unparalleled levels of competition among buyers.
Although the hot real estate market is a positive indicator for Boston, the climate is increasingly difficult for first-time homebuyers to settle in the Boston area. Today's Beantown area buyers now find themselves searching for their home in a real estate market where inhabitable fire damaged homes or barely habitable fixer-uppers are listed for $600K or $800K respectively.
What is a seller's market?
seller's market (n.)- "a market in which goods are scarce, buyers have a limited range of choice, and prices are high" (Merriam-Webster)
In a seller's market, buyers are at the mercy of the market and are much less likely to hold the position of power. Bad news for home buyers, but great news for seller's who can make a higher profit because of the increasing demand for housing.
In a buyer's market, the power reverses—buyers are in the position of power and are much more likely to able to negotiate terms (i.e. price) in their favor. The seller is less likely to get their ideal list price.
It is certainly seller's market in the Boston area—the low inventory for homes remains vastly disproportionate to the continued exponential growth of Boston residents.
Want to know how can you succeed in your home search? We've put together a handful of tips to keep in mind while finding your Boston home:
Tips for Home Buyers in Seller's Market
Set realistic expectations. Everyone loves being optimistic, but it's also important to consider the reality. Your expectations, your must-haves, and/or your budget may not align with the current climate of the real estate market. For example, in a seller's market, there is less leverage for a buyer to negotiate repairs.
Get prequalified/preapproved for a loan by a lender. Be proactive by getting prequalified and having a letter to show sellers. Why? Sellers want to see proof that you can afford a loan and will be more willing to accept your offer before someone else who is not prequalified.
Make a strong offer and move fast... Buying a home in a seller's market is not a gentle courtship. When you find your ideal home in a competitive market, chances are that there are plenty of other people who see the same potential for themselves. Be agile by submitting your offer as soon as possible.
... then be ready to anticipate a bidding war. Even after you put your best foot forward with your strong offer, don't be surprised if you're caught in a bidding war.
Work with an experienced real estate agent who you can trust. There are so many obstacles buyers face in any real estate climate, but searching in a seller's market requires an extra know-how to succeed in your home buying journey. A knowledgeable real estate agent will help find the best listings for your needs, identify the right opportunities, recommend the right way to proceed in a bidding war and so much more.
- 6 Major Mistakes Buyers Make in a Seller's Market (Trulia)
- How to Successfully Buy a Home in a Tight Seller's Market (U.S. News)
- How to Buy a Home in a Tight Housing Market (Forbes)
- House hunting? Here's how to win a bidding war (CNBC)