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Image by mohamed Hassan from Pixabay
The Westwood real estate market is hopping! I first noticed something was happening in January last year when a neighbor sold his modest, four bedroom, two bath house at his $675,000 asking price, in a single winter weekend. It was an all-cash transaction.
Fast forward to March of this year, and another neighbor on the street quickly sold her house in a single weekend of showings. She had received four offers, each of them above the $979,000 asking price.
Around the same time, a third neighbor sold his house in a single weekend to an all-cash buyer, at 20 percent over the $699,000 asking price. He and his wife accepted an offer at a price they "never would have dreamed of asking." The winning offer beat out the next highest offer of 10 percent over asking. Usually, a buyer making an offer at 10 percent over asking price might be reasonably assured that the offer would have a good chance of being accepted. This year, things are different. Why?
It's not just Westwood, either. This dynamic is playing out in many locations across the country. My family members report that single family housing in the Los Angeles area is in high demand, going for $50,000 to $100,000 over asking price because there is no inventory. Communities in Florida apparently are experiencing the same dynamic as well.
Illustrating the decrease in housing inventory, Realtor.com reports that the national inventory of homes for sale decreased by 52 percent in March, nationwide. This decrease of inventory follows a decline of 48.6 percent in February.
The numbers make it clear that the heightened buying activity with the low supply of housing on the market is driving this market. Additionally, Norfolk County Register of Deeds William P. O'Donnell noted that low interest rates are a contributor. "There has been a strong demand for housing, single family housing in particular, coupled with a limited supply of available housing stock and historically low interest rates which could be motivating buyers to do what is necessary to secure housing."
Anyone who is thinking of selling a few years out from now may want to seriously consider if moving up their timetable is feasible, and take advantage of this sellers' market. However, if selling a home means becoming a buyer for another home, it could be prudent to roll the proceeds of the sale into a cash offer for the subsequent transaction. When competing against multiple buyers in this market, making an all-cash offer that is over-asking price appears to be the way to go, if you can swing it.
For an entertaining interpretation of this year's surreal real estate market, check out this Tik Tok video clip, contributed by Realtor Helen Hou.
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