High Prices, Low Inventory & Extreme Measures: Sizing Up the Housing Market

Housing prices are through the roof! Since the COVID-19 lockdown, there’s been little inventory and high demand. Homes are selling about as fast as they are listed and many buyers are going to extreme measures to gain that winning bid.

“Homes that I'm listing now are basically flying off the market in 24 to 48 hours,” says Joleen Rose, a realtor for ERA Key Realty Hunt.  

"Buyers are coming in with escalation clauses offering to pay, you know, five or $10,000 over the highest and best offer," she said.

"We'll get offers sight unseen, without even entering the property. Every story is crazy."

And there are plenty of them coming out of this COVID housing market.

"It was over $100,000.00 over asking, and the offer was all cash,” said Dawn Ruffini, president of the Massachusetts Association of Realtors, of one offer. "We are seeing buyers waiving inspections."

And realtor Zina DeLanders with William Raveis said you need something to stand apart in this market.  

"When the PlayStation 5...had just come on the market,  everybody wanted it and you couldn't get it," she said. "One of the offers that came in, they offered a PlayStation 5 with their offer, they were the winning bid."

And a house in Needham recently sold for $650,000 over asking.

The frenzy is even affecting people who are just living in their homes, with no plans to sell or buy.

"I probably get a request maybe once a week that someone's interested in buying my house," said Margaret, who lives in a Boston suburb, and didn’t want to give her last name.

She has a folder filled with requests, which are mostly from builders and developers.  Recently, she received a letter from an individual buyer that included an offer to swap houses if Margaret was interested in downsizing.

NBC10 Boston tracked down the author, Katie Cameron, who said she and her husband have targeted a few specific neighborhoods.

"It’s been a very challenging market the last few months as we began this journey," Cameron said. "Out of 50 letters, we heard three responses, and I’d say one is slightly realistic. The person that owns that home happened to have gotten that home from letter writing as well."

Buyers are trying anything and everything because inventory is low.  So low, that March showed the fewest number of both single-family homes and condos for sale since the Massachusetts Association of Realtors began reporting data in 2004.

The median price for a single-family home topped $549,000 in March.  That’s compared with $480,000 a year ago.

"Nationally, we're short about 6 million housing units, and that's being exacerbated by the fact that we had low interest rates for quite some time and we have high demand of buyers," Ruffini said.

And, she warned, don’t expect a market cool down, now that the Fed has raised interest rates. 

"That is not slowing down any of the competition.  It's just moving it into another price bracket."

So, what can buyers do?

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Experts say don’t try to time the market and keep your emotions out of it so you can make smart business decisions.

"The Massachusetts Association of Realtors does not recommend waiving inspections. It really is the best time for you to find out whatever you need to know about the house," said Ruffini.  

"But we do recommend that you put your best offer forward as your first offer, because it's most likely going to be the only opportunity that you get."

She also said patience will come in handy and serve you well in this market if you’re house hunting.

With these trends continuing, here’s another final bit of advice.

You don’t want to overbid and regret that you won. Being house poor can be a very poor choice.