Top 5 Moving Trends to Watch
It’s no secret that the housing market has been hectic for buyers over the last few years. The Washington Post recently reported on a vicious cycle that’s keeping the inventory of homes for sale low across the country. The problem: sellers are interested in moving, but can’t find a home to replace the one they want to get rid of, so they don’t list—which, in turn, discourages other potential sellers from listing. The number of listed homes has dropped by 8.1 percent since last year, a consistent trend over the last three years.
This reduced inventory has led to some crazy trends that may affect buyers in your market. When you’re working with new clients, here are a few things you might want to consider.
Couples buying homes together
These days, single-family homes aren’t always “single family.” To save money on increasing home prices, pairs of families have started buying homes together. The New York Times recently reported on a couple and family friend who purchased a three-story home together, splitting the living space so each has their privacy and living area.
While it’s certainly not traditional, it’s a solution that’s working because it enables families to buy homes in neighborhoods they couldn’t afford otherwise. The article highlights other families in New York that are opting for this lifestyle too. One thing they have in common: open communication and agreements that provide an exit strategy if someone cannot keep up with his or her end of the contract.
Sending letters with an offer
Affectionately referred to as “love letters,” many buyers are sending personal notes with their proposals in the hope that their story can persuade the seller to rule in favor of their purchase. If you’ve watched any HGTV, this likely isn’t news to you.
As buyer competition heats up, offer letters are becoming increasingly popular. Do a Google Search for “sending letters with house offer,” and you’ll get more than 171,000,000 hits, including several articles with detailed instructions on how to construct the perfect letter. Moreover, some of these letters can be quite elaborate, with families opting for full-color, newsletter-style pieces, like this example from J.D., the owner of the Semi-Delicate Balance blog.
For most buyers, a moving truck is the last expense they’re worried about—unless they’re moving out of San Francisco, that is. A recent story published in the San Diego Union-Tribune indicates that people trying to high-tail it out of the Bay Area are forking over as much as $2,000 to rent a moving truck. By contrast, people moving into San Francisco pay just a fraction of the cost: closer to $150. You can double check the figures for yourself at AEI.
San Francisco ranks in the top 3 most expensive U.S. cities for 2018, with the average 3-bedroom home pricing at just over $1 million. As families flee for more affordable cost of living, their exodus has created a moving truck shortage, resulting in a massive spike in rental prices. (This is what your high school economics teacher meant by supply and demand.)
Overbidding to the extreme
Sellers are currently on top, with the average U.S. seller pocketing a profit of about $54,000, according to CNN. Sellers on the west coast are getting the highest return, with the largest profits totaling up to 91 percent. Realtor.com recently detailed some extreme situations, including one couple who bid $25,000 over the asking price and still lost to another buyer.
Of course, that $25,000 pales in comparison to0ne Seattle home, which recently sold for $100,000 over asking price, according to KUOW.
Alternate housing solutions
Tiny living isn’t just a popular option for single people or young couples with small kids. With a massive housing shortage, all kinds of people are looking for alternative ways to get a roof over their heads—even if it’s the roof of a car. As Curbed reported recently, more busy workers are taking advantage of a “Safe Parking Program” in Santa Barbara, California, which offers people a safe place to park their cars and sleep.
Boat owners, meanwhile, are taking another approach by opting to live on a boat rather than pay expensive housing costs. Will Haduch, of New York, docks his yacht (not exactly shabby living) at a Jersey City marina for just $700 a month, according to his story in the New York Post. A 1-bedroom in the same area can go for as much as $2,500 per month.
While these trends may seem extreme, they’re indicative of the market your buyers may be facing. Understanding their concerns, and honestly assessing their ability to purchase a home in the current climate, is key to establishing a long-term relationship, no matter how they fare in the buying process.