The Frenzy of 2021

I find myself telling the same stories over and over, and need to just put these in a blog post. Guys, this market has been hot for awhile, but it’s just achieved bonkers status in the past week or so. We ended November at .9 months of inventory (I hear near 6 months would be at equilibrium), but I’d venture a guess that we have now ended December even a few points lower. Less than .5 wouldn’t surprise me.

On Christmas eve my client lost an offer at 20k over list price. They wrapped it up and made their decision in less than a day. After more deflating bidding after this, he went ahead and signed a new build contract, which is my best recommendation if you’re going to want something this month.

On the 30th I went and did several showings for clients, all with lines in front of the door waiting to show, approximately ten groups. There were a couple of other showings I couldn’t get in at all because all the appointment slots were taken for the whole day. Anyway, I patiently waited, while I listened to another agent tell his story of just losing an offer at 70k over list price. Anyway, we went ahead and placed an aggressive bid at 30k over. On new years eve we learned that we lost (no surprise), and that there were 97 offers total! I haven’t heard it confirmed officially, but listening to realtors in facebook rumor mill is that they went more than 100k over asking.

Today I just got word back that another one of my client’s offers was lost. The agent told me they received 38 offers and the winner bid 75k over, while also paying for title policy (3k ish value). 
So my advice is to go with new builds this month, because most don’t allow bidding wars (although some have started in the past couple of months)… if you can find a new build to buy! The problem is that almost no one has any inventory, and you have to get on a waiting list usually even for the upcoming released lots. My wife was helping a client’s new build inquiry this morning and learned that everything had just flown off the shelf like pandemic toilet paper. “We sold out Sarita Valley Phase 2 in 10 hours. 37 contracts [offers] on 28 homes. Your buyers are so fortunate they had you to get them a place here!“

The release of a new phase is not something that you’ll get a zillow or redfin notification for. It’s not something most people know about unless they’re in close communication with a builder. That’s what we try to do for our clients, and are calling them several times a week, sometimes even visiting in person to get the information we want as well. It doesn’t even hurt to have you and your realtor both in communication with them in times like these, for extra insurance.

So how can you possibly win a house in January of 2021? I won’t lie, it will be very hard. Take a new build contract if you can get one. Also, in almost every case this month, until you get to the higher price points closer to seven digits, where the market frenzy slows down and thins out a bit, almost every accepted offer will have a waived appraisal. That means if/when it appraises for less than contract value, you’ll have to pay the difference in cash, which your loan won’t fund. If your finances do not enable you to do so, then it will be a near impossible task this month.

Now of course there will be lightning strikes that don’t fit what I just said, but they will be few and far in between. Look for homes that have been on the market more than 5-6 days. Look for ones that are also quirky, not pristine, or not quite move in ready. Those might provide a less aggressive bidding situation. There are of course other tricks to helping your offer be more competitive, but I’m not going to reveal all my realtor tricks here in public. You’ll just have to work with me if you’d like to learn them all.