March 17, 2023
Why Are Listings In Short Supply For The Triangle?
Since the housing market corrected in 2015, there has been a shortage of inventory of homes in the Triangle Area that match the median price range of $280k.
Many homeowners in that range are holding off selling because their dollar won't go far when purchasing a new home in a slightly higher range. Homes that do end up on the Triangle market typically sell within a few days and have multiple offers made.
According to a July ABC11, Triangle Housing Market Faces Surge In Interest, But Lacks Inventory, there were nearly 9,000 homes for sale in June 2019. In June 2020, fewer than 5,800 homes were listed.
While new listings are down 6.3% year-to-date, closed sales are up 0.8%, highlighting the market's competitiveness. Several factors are contributing to the current competition. Historically low mortgage rates, now below 3%, are attractive to buyers and homeowners looking to refinance.
Coronavirus & Housing Markets
The COVID pandemic has also affected the Triangle market in other ways. Travel restrictions have resulted in more investment properties being purchased near mountain and beach areas. Social distancing has also led to virtual house tours.
According to a recent Redfin report, 45% of recent homebuyers made an offer without first seeing it in-person.
Despite 2020 being a particularly challenging year for many markets (especially in the North East), the Triangle has actually seen an increase in listings every week since mid-April.
This article from July talks about how the lifestyle changes from COVID are resulting in homeowners seeking more space for home gyms and renovations.
Such a low inventory has caused appraisers to resort to unconventional methods for evaluating properties. Usually, they would assign values to characteristics of the subject property against comparable properties.
Now, because there is a low inventory to compare the subject to, appraisers also have to include market trends such as days on the market, multiple offers, and multiple showings.
Hot Markets Create More Demand Than Supply
In hot markets, like what we see in the Triangle, home values are unable to keep up with how quickly the homes are selling. Home appraisals during a "buyers market" or a market that's saturated with a ton of homes and little buyers, will be appraised lower.
What can you do about a low appraisal? Buyers and sellers can be devastated when an appraisal value comes in lower than expected.
It is crucial that you remain calm and do not make any decisions based on emotion. This is when a trusted and experienced real estate agent becomes an indispensable asset. Fall back on them and their expertise to help you make choices that are in your best interest.
A low appraisal may not necessarily be the end of the road; there are still some tools in the agent's belt. An experienced agent can help you renegotiate the purchasing price, look into increasing the downpayment or even dispute the appraisal.
Staying grounded, understanding your options, and working with a good lender and the right agent can be the key to overcoming a low appraised value.
If you found this post informative, I'd be very grateful if you'd help it spread by emailing it to a friend or sharing it on Twitter or Facebook. Thank you!
Speak to an actual person.
If you have any questions regarding real estate transactions, drop us a line.