Buying a home? The numbers are in for 2020 and they are not promising for buyers.
San Diego County, one of the hottest markets in the country, saw an average price increase of 14.7% from December 2019 to December 2020. If this price increase is not sobering enough, the number of homes for sale dropped 45.7% for the same period. Remember, however, that throughout 2020 people bought homes. Not even the Pandemic stopped buyers from pursuing their dreams.
The present market
If anything, buyers entered the market whole-heartedly. Listing agents report 15 to 20 offers in the first few days of being on the market. So offers below asking are not likely to be answered. Outrageous offers are not accepted unless substantiated with the funds needed to close. Greater San Diego is particularly subject to these conditions and their results. Expectations are that we will not see any real change in 2021.
What’s going on
The early days of 2020 still had buyer- and seller- agents talking to each other. These days things are moving too fast to expect a discussion arriving at a negotiated middle-ground. All this competition over any one decent home means that sellers will move on to the offer that makes them the most money. Listing/Sellers’ agents work on screening out offers that seem too fanciful. Buyers can expect that they will be asked to cross-qualify with the sellers’ lender. Keep in mind that the seller can not require that a buyer use a particular lender.
What to do
Ultimately, no matter how great of a borrower the buyer might be, the property in question has to be found to be worth the amount offered. This is where some buyers stand above the rest. The buyer bringing cash to make up for any shortfall in the appraised value versus the offered amount wins. This buyer is ahead of anyone counting solely on financing to buy the home. For example, the seller wants $550,000 for their home. The offers are coming in between $570,000 and $600,000. The appraisal comes in at $569,000. The buyer who brings the most cash beyond $569,000 gets the home and the seller gets the greatest amount possible. So set aside some of your cash to make up for any shortfall between the amount you offer and the eventual appraised value.
If you are thinking of buying a home, I can help! Contact me at 760 622 5087 or by email at firstname.lastname@example.org