Few months into 2013 and the real estate market in the Greater Pasadena area is still going strong. We have definitely turned the corner and are officially in the Seller’s Market. A home seller’s market is categorized as having 3 months of housing inventory or less. Since April of 2012, Pasadena has seen less than 3 months worth of listings, but over the last few months, there’s even less inventory closer to 2 months worth.
Here’s an at a glance overview of some critical stats. Note the very low # of sales each month are due to lack of inventory:
So what does it all mean to you if you are looking to buy a home right now?
It’s a simple supply & demand issue. Less homes and lots of home buyers create lack of supplies. In February, anytime, I or one of my real estate agents wrote an offer, we were in a multiple offer situation. Our buyers had to compete with others. And, we are not talking about one or two competing buyers. We are seeing dozens on any one property listing.
READ MORE: Winning the Multiple Offer
Cash is King, but Pre-Approval is not far behind:
One in three home sales in Pasadena are all cash purchases. Yikes! How do I compete? Honestly, it’s pretty hard to compete against fellow home buyers who are able to buy for all cash and close escrow in a week or so. However, let’s keep in mind that 2 out of 3 home sales are financed. To be considered a strong buyer, you need to have full approval from a respected, lender known in the community as standing behind their letters. No surprises!
Full approval means that you have completed an application, provided all your financial documents to the lender including last couple of years of income taxes, bank statements, pay stubs, etc. The lender has fully reviewed the documents, taken you through initial underwriting and the only thing that is still outstanding is a purchase contract and appraisal on a home.
Down Payment is Important:
The higher your down payment, the easier it is to get a loan, the more comfortable a home seller is in accepting your offer. Conventional loans with 20%+ down are more desirable to a home seller than a FHA buyer with 3.5% down.
Don’t despair if you don’t have a large down payment. Make sure that you are fully approved for a loan and understand that it might take you a little longer to get acceptance, but the right house is there waiting for you.
When home sellers and their realtors are reviewing multiple offers, they look at price and terms. Terms are conditions of the sale like length of escrow, length of contingency periods, who pays for termite, inspections, home warranty. Terms matter! A home buyer can position themselves as being easy to work with or a “pain in the ***”. Work with your real estate agent to ensure that you make it easy for a home seller to accept your offer.
Always, always write a letter to the home seller to tell them who you are and why you want to live in their home. Selling a home, many times, is a difficult and emotional decision. Some sellers want to ensure that the home is transferred to owners who will love and care for it as they did.
If you have any questions or need help with the purchase or sale of your home, give me a call at 626-629-8439.
Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team. She is available to assist you with all of your real estate needs. Email or call her today at (626)629-8439.