When it comes to settling down in the 21st Century, new home buyers are making it clear: They’re willing to commute to get a better deal.
After a decade of fretting over how to get young adults to venture out of the pricier downtown areas, it’s becoming apparent that movement to suburbia and beyond is becoming the norm, rather than the exception.
According to the U.S. Census, suburbs are growing faster than big cities, almost a direct reversal from the beginning of the decade.
U.S. cities with 200,000-plus residents grew by a collective 326,000 people between 2017 and 2018. Cities with fewer than 200,000 grew by 421,000 residents over the same time period.
But the shift to the outlying areas may be creating a new competitive landscape. Even on the periphery of the urban core, new home builders have spent less time concentrating on affordable housing, and any current homeowners are living in their abodes longer.
As a result, inventory remains tightest at the entry-level price point. Bidding wars declined over the last two years, but are making a comeback. Buyers are increasingly having to go above and beyond to make sure their offer stands out from the competition.
Upping the offer isn’t always an option. Unlike baby boomers and many other move-up buyers, most millennials can’t afford to spend outside their budgets. Most don’t have a home they can sell, or assets they can cash in. Further, many are burdened by student loan debt.
Here’s some tips for placing a competitive bid: Start with a water-tight pre-approval letter from your trusted Bay Equity loan officer. A pre-approval letter lets sellers know you’ve been financially vetted. Sellers like knowing that buyers are serious and can get the deal done.
Pre-approval doesn’t just ensure a better shot at competing with other buyers - it can also help you stay true to a budget.
Other strategies include waiving contingencies, paying in cash or including an escalator clause.
If you truly love a home, experts also recommend making a personal appeal. Include a letter to the seller describing what you love about it, and what plans and dreams you plan to pursue in the future. It may not work, but it never hurts!
Regardless what homes you make offers on, you shouldn't overextend yourself. If it is meant to be it will happen, and there are many, many more houses out there. Bay Equity is here to help.