On Sunday, Jamie Smith Hopkins welcomed The Baltimore Sun’s readers to the “post-bubble, post-bust housing market.” What does she mean by that? It’s an awkward situation where buyers like our client David Igla enter what they assume to be a buyer’s market—a logical assumption given that we are just getting out of an economic recession and each month we hear reports of record low home prices and mortgage rates. But much like many other buyers, half of the Baltimore-area buyers we’ve worked with this year, to be exact, David entered the market and found himself in a bidding war. And not just one bidding war, but three, before he finally wrote the winning offer on the home he ended up buying.
Bidding wars aren’t fun, and we have no one and nothing to blame but the inventory shortage we’ve been seeing for the last several months. We measure inventory based on months of supply (the number of homes for sale divided by the number of homes sold in a given time period). Six months’ supply represents a balanced market, whereas anything less than that makes for a seller’s market. In April, Baltimore County’s inventory weighed in at five months’ supply.
So what can you do to survive today’s market? For sellers, pricing is key. “If you price it to sell and it shows really well, it’ll be gone,” said Lynn Ikle, David’s agent. “If you think, ‘I’m going to take advantage of this market,’ and overprice it, it’s going to sit.”
For buyers, making the highest offer is important, but it’s all about knowing what the seller wants and giving it to them. Lynn’s clients buying in Stoneleigh recently beat out two other offers because they offered to let the sellers stay in the home for two months after closing—rent free.
We’ve got a slew of other bidding war strategies to arm yourself with, from offering all-cash when you can, to hand-delivering the offer complete with a personal letter explaining why you and your family are most deserving of the house. Read our blog post about how to win bidding wars and went to back away, join us for our next Competitive Offer Webinar on June 5th, or get in touch with an agent to get started.
For a complete picture of the Baltimore and Washington, D.C. area markets’ most recent stats and trends, download the Redfin Market Reports here: Redfin-Baltimore-Real-Estate-Market-Report-April-2012; Redfin-Washington-Real-Estate-Market-Report-April-2012.