Market Info

What is a seller’s market?  A seller’s market is one in which there are more buyers wishing to purchase than homes available for sale.  An indicator of a seller’s market is when less than three months of inventory is available for sale.  Three to six months of inventory is considered a neutral market, and more than six months of inventory is a buyer’s market.

During a shortage of inventory, homes that are well priced or in a highly desirable neighborhood often receive more than one purchase offer.  In San Mateo County there was less than one month of inventory available for sale in December, 2013.  Given current inventory levels, the potential for multiple offers is expected to continue into the beginning of 2014.

How should a buyer strengthen their offer when there are potential multiple offers?

While purchase price is extremely important in the offer, a well prepared and presented offer can sometimes edge out the highest monetary offer.  Aside from purchase price, what should a buyer include with their offer for serious consideration by the seller?

Build rapport before you submit an offer

The impression you make on a seller often begins well before you even decide to submit an offer on their home.  How much notice do you give a seller before requesting an appointment to see their home?  Is your agent careful to lock all the doors and secure the home at the conclusion of your visit?  Are you careful where you park when you arrive to view the home so you do not inconvenience the neighbors?  At this stage the sellers may not yet know your name, but you are making an impression with your visit to their home.

Do your homework

Carefully review all disclosures and reports provided by the seller.  Thoroughly investigate financing options available to you.  Understanding the appraisal process and its impact on the amount of money you can borrow is extremely important in an escalating market. Make certain your agent is communicating read more...

According to the California Association of Realtors (CAR), 72% of all home sales in California in 2013 involved multiple offers. This staggering rate was the highest in the past 15 years.

In San Mateo County, the number of properties offered for sale was down 25.2% for the year. The lack of inventory was a significant factor in generating multiple offers.

Other factors influencing the competition for properties offered for sale include:

• 82% of Investors who purchased property in 2013 indicated they would retain the purchase as rental property, while 18% purchased with the intent to “flip” the property and return the inventory to the sales market. The inventory staying off the market as rental property will decrease the available sales inventory into 2014.
• The share of International buyers grew from 5.8% in 2012 to 8.0% in 2013, with 36% of this buyer group paying all cash for their real estate purchases.
• With the price of homes increasing, equity sales have increased sharply since 2012. More equity in the sale of a property translates into a larger down payment for the next purchase. Expect more sellers to offer their home for sale in 2014, and to repurchase after the sale of their existing property.