For the first time in many years, the problem facing home buyers is no longer finding a way to afford a home, but rather, finding and buying a new home before someone else does. Although there are many factors providing home buyers with incentives for buying a new home including the affordable prices along with record low mortgage rates, the prominent issue facing home buyers is the low inventory of homes available on the market.
According to the San Diego association of Realtors, there only were 10,627 homes and condos for sale in the month of May. That number was a decrease from the 11,032 homes available in April is more than 61% down from lasts May’s number of 17,384 homes. Last month there were 3,348 properties sold, which equates to 3.2 months of supply on the market. If supplied remained constant and sales continued at this rate, San Diego would run out of available homes by the end of the summer.
In a balanced market, there is usually a 5-6 months supply of inventory. The figure below illustrates how inventory has decreased over the past year. Interestingly, that the three zip codes with the largest number of sales in May were in the San Bernardino 92127, Downtown 92101 and Mira Mesa 92126.
So what does this all mean? Given our current circumstances, there is more demand than there is supply for the real estate market. This is due to the fact that homes are at there most affordable level in years along with mortgage rates dropping to record lows which has resulted drawing in more and more potential home buyers and thus increasing the demand on the market.
On the flip side, the supply of houses available for purchase has slowly decreased over the past year due to the fact that many available homes are being bought up quickly due to these market incentives. As a result, multiple offers on houses have become the norm with many potential buyers competing with one another to land their dream house. This scenario has not been occurring just in San Diego but all across the nation.
The figure below illustrates how the number of listing for available homes has decreased by more than twenty percent over the past year and how houses are spending a significantly shorter time on the market before being sold.
So what can you do to help yourself get that new home you have always wanted even though there are already multiple offers on the house?
The answer: Get pre-approved for a mortgage loan. By already being pre-approved for a home loan, you put yourself one step ahead of other potential buyers as well as make yourself much more attractive and reliable to the seller.
Often people get confused by the differences between a pre-qualification and a pre-approval. Watch this short video to understand the difference and put yourself in a position where you have an offer that will be given higher priority.
To start the process of Applying for a Home Loan Online, just follow this link.