January has already been strong with prices up, home sales up, and listings ...down quite a bit. So homebuyers are more likely to face competition. Sales will still be strong, simply because more buyers will pull the trigger on buying homes.
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The coronavirus remains a wild card, however. The outbreak of COVID-19 is helping drive down mortgage rates as jittery investors shift from stocks to bonds. But the virus might deter some house hunters who are worried about their jobs, their 401(k)'s) and their physical health.
Fewer homes mean higher prices
Last spring, buyers had more of an upper hand as more properties came on the market and sellers tried to woo back house hunters turned off by high prices and higher interest rates.
Now buyers have fewer choices. At the end of February, there were 1.42 million units, including condos, co-ops and single-family homes on the market, up 2.2% from January according to the National Association of Realtors.
February's housing inventory was the lowest it's been in 21 years, according to NAR.
Fewer homes coupled with high demand means higher prices. In January, the median sale price for housing including condos, single-family dwellings and new construction was $306,000, up 6.7% from a year ago, according to NAR.
Mortgage rates continue to drop
But mortgage rates continue to drop as concerns about the coronavirus roil financial markets, leading the Federal Reserve to take the surprise step of cutting key rates by half a percentage point this week and more investors to put their money in bonds.
Rates for a 30-year fixed mortgage dropped to 3.56% this week, the lowest since October 2016, according to Bankrate's weekly survey.
Low rates are a key reason the greater Boston metropolitan area has less than two months of single-family home inventory available for sale, says Jason Gell, president of the Greater Boston Association of Realtors.
"We’re seeing lots and lots of people, buyers, at open houses. Interest rates are still extremely low so that ... the actual monthly payments are very affordable.''
Work with a REALTOR - That local realtor will know how to sweeten the pot for that potential seller, and make your offer the most attractive.
Go the extra mile - Consider writing the seller a letter. It doesn’t cost the buyer anything to write a nice little letter about how much they like the home. But other financial incentives, like having an all-cash offer, shortening the escrow terms, waiving contingencies and offering more money, obviously ...
Spruce it up - Even in this tight inventory environment, homebuyers' expectations have risen. "When they come into homes, they expect them to look like TV shows. They expect them to be staged. They're attracted to beautiful photos online. ... Those types of factors really do matter.
Don't get greedy - An overpriced home is still going to sit on the market. With the right price, you're likely to get a bidding war.
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