Sellers in Florida have the edge.
When the housing inventory is low, sellers can genuinely leverage it to their benefit by maximizing their profits.
The demand for homes has extraordinarily risen over the past year in Florida due to the rising interest rates. Moreover, with the end of the year drawing near, more buyers are also entering the market searching for homes. However, the current number of homes in the market is significantly lower than the demand. When such happens, the house inventory level reaches a low.
It can mean different things for both buyers and sellers. As buyers struggle to find their dream home within their budget, today is inevitably a good time for sellers to put up their properties for sale with such a low housing inventory.
But for those unaware of the current Florida real estate market and the relationship between buyer activity and housing inventory, it can all get a bit overwhelming. So here is a thorough rundown of what low housing inventory entails for you as a seller if you are ready to make a move in the upcoming year.
What does low housing inventory mean?
Housing inventory refers to the number of active houses currently on sale in the real estate market. Research shows that more buyers are looking to buy homes than the number of houses and condos listed on the Florida real estate market. As a result, more and more people are currently entering the market searching for their dream homes.
The low housing inventory is perhaps due to the low-interest rates on mortgages, which entices individuals to gain the advantage of this opportunity and buy more property. Moreover, the COVID-19 pandemic has also led people, especially the younger individuals, to flock to the cities in search of homes to build their wealth through homeownership. Lastly, more millennials have entered their home-buying years and are now searching for a suitable home.
All of this has led to more competition amongst buyers. Rising demands, coupled with fewer houses in the market, have resulted in low housing inventory, mainly because fewer homes accommodate all buyers. Hence, the cost of residences has risen as well.
Low housing inventory levels impact the market.
With the Florida housing inventory at a record low, the real estate market has become a seller's market. Therefore, it is the best time to put your property up for sale and maximize the benefits from selling your home, as you will be more in control as the seller. For example, buyers enter bidding wars with potential buyers for a particular home. In the end, sellers sell their homes at the best possible price.
In Central Florida, the housing inventory has reached a record low. As a result, there have been restricted entry of active house listings throughout the state. For example, data shows that there has been a 61% drop in available homes for sale from the past year. Low inventory has resulted in higher costs for the rest of the pending market. For example, the same data shows that the prices for houses have moved up 15% from 2020.
Recent data clearly shows that the Florida real estate market is leaning towards sellers, who are at this point, winning and benefiting from the large influx of buyers and the restricted active listings.
Since a low housing inventory entails a seller's market, how are sellers winning? With Florida's real estate market in such conditions, sellers can expect to have their homes listed for a shorter amount of time, have multiple and frequent showings, and even expect various offers from several buyers.
Overall, here are the main ways through which a low housing inventory benefits people putting up their houses for sale:
When the volume of buyers is higher than sellers and houses in the real estate market, sellers can set a higher price on their property and still have a good chance of closing a deal. There is not much room for buyers to negotiate for a discounted price in such cases. Moreover, buyers frequently enter into bidding wars with other potential buyers to purchase the house with such low inventory, meaning that, as a seller, you can sell your home for much more.
Greater return on investment
With rising home prices and demand, sellers will likely get a greater return on their equity and investments. If you plan to put up your house for sale, it would be beneficial to do some landscaping or add new layers of paint, potentially helping you negotiate for a better price. Any upgrades you will do to the house can translate into more money in such a market.
Since there are a lot of buyers in the market, it means that when a buyer does not agree to specific terms, there are others ready to do so to close the deal on the house, placing the seller is in the driver's seat and control. On the other hand, the buyers are more flexible and willing to buy a home without much negotiation or terms. Therefore, it is likely that whatever guidelines the seller sets, the buyers will be ready to meet them, making it easier for sellers to leverage the deal in their favor.
In such a market, sellers will also be less likely to bear the closing costs and other fees when a deal is closing. Moreover, they are also in control of deciding whether to do any repairs and bear their costs. In such situations, the buyer often has to pay for it all.
Pricing your home
Being a seller in the current real estate market in Florida is a good thing, as it means that you are likely to win on a deal on the house. However, setting the right price is crucial with lower competition and higher demand. Unfortunately, it is common to pay more than this price in the current financial climate.
You should price your home fairly and not keep an extremely high number as a seller. Houses at fair market value, or lower than that, are more likely to enter bidding wars amongst buyers. It means that you are in more control and can make negotiations that work in your favor. The process to getting the highest price for your home is to negotiate and price it at the market. You must resist the temptation to set a higher price despite the growing demand. To better determine the best price for your house, you should review the current prices in the market and get in touch with a real estate agent to determine your houses' value allowing you to set a suitable price for your home.
Along with that, you need to professionally clean, organize, and decorate your house and show it in its best possible light. As mentioned earlier, even minor upgrades can lead to a greater return on investment. Hence, your place should have curb appeal and show at its best to drive prices upwards and attract serious buyers.
The best time to sell a house in Florida
Real estate agents are aware of the current market conditions in the state because they are a crucial determinant of how much financial value there is in a particular home and are a vital consideration for both buyers and sellers. Most experts agree that the best time to sell a house is during December since fewer homes are on the Florida real estate market. However, market conditions vary due to several factors.
You should always review the current market conditions before selling your house, as this will help you determine whether you can win on a deal or lose and whether or not you can earn a maximum profit. In such conditions, even buyers are ready to jump on a contract, so the chances are your house will be listed for a short amount of time until sold.
As we review the current Florida housing inventory and note how low it is, it seems apparent that the best time to sell a house is right now. With more buyers in the market and less competition, you should put your home for sale as soon as possible.
The current market conditions of Florida's real estate involve an influx of buyers and fewer houses to accommodate them. As a result, there is an auction-like atmosphere, and buyers must not waste time in closing a deal. Therefore, it is essential to take guidance from a professional real estate agent before listing your house. However, either way, the sellers will likely be at an advantage in these conditions if they decide to put up their house for sale.