Here's what it's like to house hunt in one of the craziest markets in the country
This is the best time to sell a home in 20 years. Inventory is near all-time lows and home prices are at peak levels. Even the most ‘ho-hum’ homes are getting multiple offers and selling lightening fast.
But once you’ve sold your home, then what? The delight of selling fast with a tidy profit can quickly turn to despair when you become the buyer.
Fierce competition and all-cash offers are making home buying an extreme challenge across the country. And with deals happening so fast, timing a move adds another layer of frustration to the process.
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“That’s the catch,” said Esty Perez, an agent with Knipe Realty in Portland, Oregon. “I tell people, ‘Now is the time to sell.’ They say, ‘All right, let’s look at properties in my price range.’ And there isn’t much. That’s the challenge.”
The demand to buy is still strong, said Perez, but buyer fatigue is beginning to take its toll, especially if buyers can’t make the timing work out with the sale of their current home. No one looking to buy wants the music to stop without a home to call their own.
“People go from being sellers to being buyers, it’s a shock,” said Perez.
Time over money
Managing a move when the selling process can take just a matter of days and the buying process can take months, makes timing an even more important and, ultimately, valuable part of the deal.
Maura Quinn learned in January that her project manager job would no longer be remote and she’d need to move from Burlington, Vermont, to the corporate office in St. Louis.
Leaving Vermont wasn’t the plan when she and her husband John Wright bought their home there for $239,000 a year and a half ago. But after the pandemic threw them so many curve balls — losing jobs, getting jobs, postponing their planned wedding — they decided it was time to move on.
“We’d been hearing stories that people were getting crazy amounts of money for their home,” she said. “We assumed we could sell higher than we bought. It did alleviate our stress about losing our closing costs.”
Their home was listed at $299,000 and within four days they had an offer at the asking price.
“We wondered, should we accept it or wait for another, maybe higher, offer?” she said. “But the buyer was looking to move quickly and so were we. So we took it. The faster we get this part done, the more freedom we have to bid on homes.”
They are headed to St. Louis to begin their housing search, hoping they can afford more house there than in Vermont. But any offer they make will have to be contingent on the successful closing of their Vermont home. That makes it tougher to land a home in markets where bidding wars are common.
“We’re not the only people in this scenario, that have to move,” she said. “It is crazy right now. We will be competing against people buying investment homes or buying for the first time who aren’t tied into getting out of the sale of another home.”
To bridge the gap until they have a new home, they will store most of their stuff and get a short-term rental in St. Louis.
Even buyers who think they can get a jump on buying find the sudden sale of their home can throw their plans out the window.
Joe Carroll helped his mother and aunt sell a family home in Nashville and buy a newer, smaller home last month. Within a single 24-hour period, he put down money on a new-construction home for them and sold the family home, “as is.”
“I was able to sell the home for three times as much as what we paid for it,” he said. “As the seller, you can take advantage of the same market that is taking advantage of you as the buyer.”
But while the contracts are done, managing the clock — and the extra costs of extra time — to get his relatives into the new home has only begun. Meanwhile, his mother and aunt plan to stay with family and look for a furnished rental.
“We have a home inspection coming up,” Carroll said. “We don’t close on both houses until August. We don’t move into the new home until November. It is nice to keep my mom and aunt stress-free. But it is a headache.”
A long search after a quick sell
Last month, Leah and Mike Benton thought it was a good time to sell their home in Georgetown, Texas, a community north of Austin, to take advantage of the frenzied market there. Their home went fast and sold for a sizable profit. They bought it in 2017 for $349,000 and listed it a month ago for $495,000. It sold for $530,000 after just one week on the market.
Like many sellers, the Bentons tried to negotiate with their buyer for more time in their home. They asked for a six-week lease back from the new homeowner until they found a home to buy. But the buyer wanted to move in quickly and the Bentons didn’t want to lose the sale, so they scrambled to find another place to live.
While they hoped to move to Pflugerville, an area closer to Austin where Leah grew up, they thought they could buy a similar home for $200,000 less if they moved further out. After looking at between 20 and 30 homes and losing out on offers, the Bentons ultimately decided to table their search and find a suitable rental home where they can stay for at least the next year until their daughter Hailey finishes high school next spring.
Even a rental was hard to find and with a $2,650 a month rent, much higher than their previous mortgage, it isn’t a long-term solution.
In the Austin market right now, a home selling at or under the listing price is virtually unheard of, said Bradley Houseton, an agent with Keller Williams who is working with the Bentons.
“It is just going gangbusters,” she said. “Which is great for sellers. But it just makes it difficult for [buyers] who are the ‘people who did all the right things.'”
She says the Bentons are good buyers with solid employment, good income and good credit. They’ve saved $20,000 to $30,000, and as veterans, want to buy using a Veterans Administration loan.
In a typical market that would be more than enough to buy a home, said Houseton. “But it’s not like that in Austin now,” she said. “You can’t just have $30,000 in the bank and a good job and good income and go buy a house. You still have some trouble with the bidding wars and the multiple offers, and it just doesn’t seem to be letting up.”
Discouraged by all the intense competition, the Bentons eventually started to research the costs of building a new home. They made a last-ditch call to a home developer in Georgetown and got some good news: The developer had one lot available. They purchased it and plan to build a home that is expected to be finished in nine months.
“If this is going to be our forever home, we want it to be everything we hoped for,” Leah Benton said. “We are approved up to $500,000, which is enough to build our dream home. And the cost to build, even with the increased cost of construction, is what we would have to overpay to get a home anyway. Might as well get what we want.”
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