Without question, the 2021 real estate market in many states has been characterized as unprecedented. Homes have been selling at lightning speed, often with multiple offers at record-breaking prices. The challenge for would-be buyers and sellers is how to best move forward and successfully navigate the real estate market. In other words, they need some type of “road map” or strategy. And here in the Northeast, there are 3 key home selling/buying strategies that are now trending.
Homeowners Who Have Sold are Now Renting
With the growth in luxury rental residences in recent years, it is not surprising that older Americans are selling their homes and then renting. The lure of unprecedented home prices is very attractive to homeowners who have lived in their homes for over 20 years and are looking to downsize. They can “cash out” with a large windfall and enjoy the benefits of community living with a host of luxury amenities now offered in today’s modern rental buildings. Some of the popular amenities include fitness rooms with virtual instruction, outdoor pool, deck, grilling areas, conference spaces, business lounges, concierge services, big screen movie rooms, resident activities, etc.
The rental scenario is also popular among millennials who are looking to “move-up” from their starter home to a larger home now that their family has grown. Because the housing market is hyper-competitive with soaring buyer demand chasing low inventory, an offer on a home that is contingent on the sale of real estate will be unlikely to be the winning bid if there are multiple offers. My New Jersey clients, for example, recognized that trying to sell and buy at the same time, and needing the proceeds from their sale in order to buy, was not going to make for a competitive offer in today’s market. Thus, my clients opted to list their home first and then rent. My clients, who got multiple offers, were thrilled when they received an offer 15% greater than the listing price. They are now happily renting in a community with a pool for the summer and will take their time in finding a larger home to purchase. And with “nothing to sell”, their offer will be very competitive!
Homeowners are Moving Out-of-State
For the relatively small number of homes that are available for sale, the question invariably comes up as to “why” the sellers are moving. Buyers simply want to know. And some homeowners are moving out-of-state.
Among older Americans, some are selling their homes and moving out-of-state to retire in a state that offers a comparatively lower cost of living. For example, I have New Jersey buyers who are closing on a home this month and the homeowner is moving out-of-state to Virginia. He is moving to an area which has a new planned community with amenities and the opportunity to have a ranch-style home custom built. All brand new with no home maintenance issues to worry about! It’s a lifestyle choice made possible because of a buyer frenzy on his home with multiple offers way above the list price.
And with the widespread popularity of working from home, many millennials no longer need to be tethered to their offices. They are choosing to sell their homes in the suburbs and move back home, often out-of-state. For my buyers in Westfield NJ, for example, the sellers were originally from Ohio and since they could work remotely, they made the decision to move back and be closer to family.
For those looking to move out-of-state and are considering different areas where they can work from home, there are a number of cities that are offering incentives, such as Tulsa, Oklahoma. (Check out Tulsa Remote)
Moving to Suburbs to Temporarily Live with Family
At the start of the pandemic, there were many people leaving the urban areas, such as NYC, and heading out to the suburbs to live with family. The advantage was to save money on rent, but a bigger advantage was to make their house hunting both easier and get a competitive edge. Since many suburban homes were receiving offers within days (or possibly hours) of going onto the market, would-be buyers who could rapidly get a coveted time slot to see the home were in a better position to make an offer. The pandemic accelerated their timetable to move out of the city to the suburbs. And with a strong desire for some outdoor space, living with family was an option that simply made sense.
Over the months ahead, we will continue to see more changes in the real estate market. And as the market changes, homebuyers and sellers will be seeking out a strategy that works best for their lifestyle needs.
~ My Bird’s-eye View
Suzy Minken, August 2021
Curious about the story behind this article? I’d be happy to share the details along with more insights about the home buying and selling process. Send your comments to [email protected]