|2022 is upon us, and it is undeniable that the national housing inventory crisis of the past few years has impacted the way we think about the real estate market. Since Carla and I are hyper-focused on the uber-competitive NYC commuter-friendly markets of NJ; Maplewood, South Orange, Montclair, etc. where the inventory crisis has been even more extreme, we thought it would be a good idea to review some new approaches going forward.|
If we had a cute Colonial for every conversation we’ve had with clients about the inventory deficit, we’d have a Buyer’s market! We hear ourselves saying this a lot: “It’s a rough market for Buyers because Sellers, (who are also Buyers), are responsible for creating inventory by selling their homes. But, many are staying put because there is nothing for them to buy, and scarcity drives prices up.” (Rinse and repeat).
Case in point, a property in Montclair recently sold for $701,000 over list price. $701,000 over! I hope my 2023 self is not laughing at the good old days when we freaked out about a sale price that only went up $701,000. I jest, sort of.
To address the Buyer’s dilemma, we’ve compiled some options that might help you align yourself better with the current *fact* of low inventory and its inevitable repercussions. Compromise is necessary. But take heart, sometimes compromise leads to unforeseen gifts. Like a home you LOVE that you never would have considered had you not shifted your perspective!
- Compromise on Features. A reasonable option depending on how committed you are to your list of desires. Maybe you can create a primary en suite a few years from now, or finish the basement down the line. But do keep in mind that renovating, when you are in the weeds with babies or toddlers, is not for the faint of heart.
- Compromise on Updates. A good option if you are OK with living with outdated cosmetic features. Hey, those 1950’s/60’s baths with lavender tile are all the rage now anyway! That said, if systems are in need of repair; heating, electrical, windows that actually open, a roof that doesn’t leak, etc., you will need to address them ASAP. Also, see above re: babies/toddlers.
- Compromise on Size. For this, conduct a realistic analysis; maybe you’ve been living in close quarters for so long that even a small space upgrade will suffice. Maybe a tiny backyard is better than none! However, it’s easy to get swept up in market competition while losing the whole purpose of your move – if you and yours absolutely need ample space, this should not be where you compromise.
- Compromise on Location. This is an interesting conversation. On the one hand, there are so many great areas that might not be on your immediate radar, that offer more inventory. On the other hand, location is the big Kahuna, market value-wise, and can dictate a lot about your quality of life. So it’s something to weigh. Anecdotally, this past year we had Buyers who were initially looking in Maplewood and South Orange, who delightedly closed on homes in Orange, Union, and *Bloomfield (*Bloomfield has more inventory but bidding wars can still get intense!)
- Compromise on Condition. There are lots of “as-is” sales cropping up. Sellers figure that it’s a Seller’s market so why should they lift a finger? If you are a super-vetted Buyer, it’s one thing, but for the record, we don’t recommend purchasing a home completely “as-is” if you are a newer Buyer, and strongly recommend consulting your attorney regardless to fully understand the implications of “as-is” transactions.
- Search in a Lower Price Bracket. It follows that this compromise will include at least one if not more of the compromises listed above. But maybe you can actually get a house because you have more wiggle room to bid higher.
- Offer More $. And maybe considerably more than you set out to pay, (but only if you can actually swing it, of course). This becomes a quality of life issue – you don’t want to live with the daily stress of making ends meet. But in this market, if you don’t want to compromise any of the above, it is most often a necessity in order to procure a home that checks all the boxes.
- And the final option…Stay where you are. Don’t move!
|Remember, when you decide to make an offer in Maplewood, South Orange, Montclair, or other hot NJ commuter towns, bidding wars are the standard. It’s important to know that the offer price is almost always the most persuasive feature, BUT there are other provisions that might matter as well. Contact us for more info…or just to discuss this nutty market. We love the conversation, and are here to help you strategize on either and both sides as a Seller or Buyer!|