Thinking about buying a home this summer? While the sunniest time of year can be ideal for exploring new neighborhoods and visualizing future patio parties during viewings, it’s important to understand that the current housing market still is experiencing increased existing homes sales and listing prices, coupled with decreased starter-home inventory. But there are perks to house hunting right now, too. Here, Trulia offers some facts and tips to help you get the most out of this year’s summer housing market.
Prices drop during the summer
Summer may be a busy home-buying season, but it’s not as crazy as spring. In fact, prices typically drop from May through October. If you can hang on until late August, you could find a really great deal—that’s when nearly 14 percent of listings get a price cut.
PMI is getting more affordable
Private mortgage insurance began getting less expensive after PMI lenders MGIC and Radian lowered their rates this spring. That will cause PMI companies to be competitive, which is going to bring them all down. Because PMI is typically required when homebuyers have a down payment of less than 20 percent, that means it’ll be cheaper for some buyers to get into homes sooner.
Don’t discount older listings
When homes are flying off the market within days, it’s easy to think a listing that’s a week or so old is a red flag. That’s not always the case. Often, it’s because a buyer got cold feet and pulled out of a deal on a perfectly good house. But thanks to the assumptions people make about older listings in busy markets, the delay can cause the price to decrease.
Consider a fixer-upper
In a competitive market, it’s important to be flexible. That could mean going with a fixer-upper, even if you were imagining a move-in ready dream home. Although the number of starter homes on the market is shrinking, there were 8.3 percent more fixer-uppers among them than there were six years ago. Just be prepared to move quickly because there only is going to be a couple of options at a time. Also, when new listings come on, it’s going to be pretty competitive.
Get to know the neighborhood
In competitive markets, it’s tempting to make an offer on any available property that fits your criteria, but if it’s in the wrong neighborhood, you may never end up feeling at home in your house. Take the time to do some community scouting before making an offer. You might notice convenient parks and new playmates for your kids—or be relieved to find more nightclubs than strollers on your block. You also can ask your future about the area.
Make the strongest offer—even if it’s not the highest
Obviously, now is not the time for low-ball offers. But the strongest offer isn’t always the highest one. Cash offers often are the secret to a winning bid. You can be the highest offer by thousands of dollars, but a cash offer may take precedence. Coming up with a cash offer could be difficult for many buyers, but there are other ways to make a strong offer that don’t require lots of money. This includes generous contingencies, like a shorter closing or inspection period, and writing a personal letter to help make your offer stand out among others.
