It’s Time For A New Approach!
This year has been unlike any other and yet while other industries were suffering significant losses, the real estate community posted impressive numbers. Why? It was the perfect storm of low interest rates paired with an increased demand for housing. Turns out if you are going to spend 90% of your time at home, you may find yourself in the market for something better suited to your needs. And it wasn’t just a home office; this year we also needed private outdoor space.
When the shutdown first happened it was hard to tell how this would impact the industry. My office had five deals fall apart in one week. Only it wasn’t because banks stopped lending or clerk’s offices were closed. I watched, understandably so, clients lose their nerve. But after that first month, the momentum started to grow.
We expect to see multiple offers in the spring market, but this year it never stopped. Multiple offers were de rigueur all summer and fall. And now here we are in winter 2021 and our clients are pursuing properties that are both “just listed” and have between 5-10 offers, especially if the property is in good condition and priced below $400,000 i.e. “affordable”.
Industry news headlines will tell you that nationwide housing inventory is at a historic low. This is always true in January, so it feels familiar. Only this year when our clients ask us if it will get better in the spring market, we are in a position of saying “no”. Yes, there will be more houses for sale, but there will also be more buyers. This is good news for sellers, but in practice most sellers need to purchase a new residence, so effectively everyone is in the same boat.
It’s time for a new approach. Step one; try not to follow the herd. Consider an unfashionable neighborhood. Push yourself to consider locations that are not on your radar. This inventory shortage is not being felt uniformly across our region. Step two, consider a fixer-upper, I know, you are busy and you just want to move in and not have to think about maintenance, but there are renovation loans, and there are real opportunities for people willing to step outside their comfort zone. Step three; consider purchasing land for micro development.
The question you should ask yourself is which neighborhood is the next place to invest? I used to sell Baltimore’s Remington neighborhood for $50,000 - $115,000 per row house (way back in 2012) and coming up on ten years later my office is selling properties in this location for $200,000 - $289,000. In real estate people who flip houses get all the attention (hello HGTV) but the truth is the best money to be made in real estate is through longer-term thinking. When you’re ready for a fresh approach, we’re here for you.
Rachel Rabinowitz is the broker and owner of guerilla realty, Baltimore’s modern real estate company. She can be reached at: firstname.lastname@example.org