Year over year we are facing over 40% less inventory in the housing market than this time last year. To understand what the rest of 2021 will look like I think it’s important to take a deeper look into 2020. We know 2020 was not normal, to say the least, but what happened as it relates to the housing market?
Housing Inventory Hit Record Lows in 2020
One of the main reasons for low inventory in 2020 was “seller fear.” It wasn’t because homeowners couldn’t sell their homes or that they didn’t have a surplus of equity to sell. In fact, it was just the opposite. Once they sold their home, where would they go?
The Effects of Seller Fear
Due to the insatiable demand for housing in 2020, homeowners were torn on what to do. On one hand, they could get top dollar for their home, assuming it was in reasonable condition. On the other hand, houses weren’t staying on the market long. If a seller listed and sold their current house too quickly, they were afraid they wouldn’t find another house on the market in their price range in time. Not to mention, we were in the middle of a global pandemic.
Now we’re well into 2021 and homeowners are generally still holding on to what they have, slightly more now than last year. This amplifies the negative effect on inventory. Also worth noting, we’re still in a pandemic at the beginning of 2021 but taking large steps toward normalcy.
What Now …
At Tru Realty, our agents understand the robust Phoenix market conditions and just how they compare to the rest of the country. We are predicting the current trend of low inventory and high prices to continue for the unforeseeable future. With that foresight, we have developed a seller-friendly contingency.
In a real estate sales contract, there could be many different types of contingencies included but all it means is that the sale of the house hinges on something else happening first that was agreed upon prior by both the buyer and the seller.
What is a Seller Contingency?
Normally, once a seller accepts a contract they cannot back out. They are locked in. Our attorneys have developed a contingency to help our real estate agents get MORE LISTINGS!
Our seller contingency addendum has the buyer agree to give the seller an allotted number of days to identify another house to move into. Should the seller not find another property, then the seller can unilaterally cancel the contract.
Surprisingly (or not), buyers in this market are agreeing to these terms – they get it! With countless offers rolling in on almost every property available, buyers and their brokers are allowing sellers more time so they are more comfortable pursuing a sale.
Now Is The Time.
Whether you’re a seller looking to list your house or you’re a realtor looking to move brokerages, we got you! We suggest speaking to Tru Realty first. We are a consumer-focused, tech-enabled brokerage that cares about giving an amazing white-glove experience. Reach out today!
*Realtors: Schedule an introduction with me here.
About the Author
Sarah C. Richardson is one of the preeminent leaders of residential real estate in Arizona. As the CEO and founder of Tru Realty, she is responsible for both the daily operations and oversight of the multiple growth strategies that the brokerage carries out. Sarah launched Tru Realty in 2010 as a way to serve a marketplace that was seeing a shift from auction-centric fix/flips to an MLS flow. She is now rethinking the way her brokerage uses technology to better serve clients and agents alike.