The 2016 U.S. housing market should see the strongest level of activity since 2006, says a recent report from Realtor.com. For buyers, that means a tougher, more competitive market – one that requires a specific set of skills and instructions.
But number one for homebuyers should be starting their home search right now, in the chill of Old Man Winter, to land a game-changing purchase deal.
“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory and fierce competition between buyers,” notes Jonathan Smoke, chief economist for Realtor.com. “Buyers looking to close need to keep an open mind and be prepared to move quickly when they find a home that meets their needs. For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly.”
Other real estate insiders agree.
“Every realtor enjoys taking homebuyers out to look at homes when it is a beautiful sunny day,” says Carl Artopoeus, founder of REBoggle, a company that provides real estate agent fee rebates to buyers and sellers. “But how many of them enjoy venturing out in the wind and rain to look at houses? Since fewer people are willing to house hunt during the harsh winter months, there is less competition. Sellers may also be more motivated to take an offer now, especially if the home has been for sale over the holidays and did not receive the right offer.”
Realtor.com also advises getting started now to get ahead of the crowd, and get a great deal early in 2016.
“Be the early bird,” Realtor.com said in in an email to TheStreet. “Over 85% of buyers who plan to purchase in the next year intend to buy in the spring or summer of 2016, according to our most recent survey. With roughly 50% more listings inventory relative to the number of potential home sales expected in January and February, buyers who start their search early face less competition with nearly the same number of homes.”
Another good tip – don’t just focus on buying a home in the winter months; focus on getting the right mortgage lined up first. With fewer customers clamoring for a home mortgage in January or February, you’re increasing your odds of landing a great deal.
Mortgage rates are expected to reach 4.65% and prices are predicted to rise 3% year over year in 2016, Realtor.com estimates. Buyers planning to finance their purchase should put as much effort into getting the right mortgage now as they do finding the right home. A lower interest rate can make the difference in qualifying for a home and save thousands over the life of the loan.
When you do nail down a good mortgage rate deal, start right in on the home purchase, and ask questions most home buyers aren’t asking – but should ask.
“Get your real estate agent to find out how much the buyer paid for their home and what the loan amount was,” advises Timothy Frie, founder of Norman & Page. “Most real estate agents who are members of the National Association of Realtors have access to a tool called ‘RPR,’ which gives them access to that information. With this data, some simple math could give you a rough estimate of how much they might have left on their loan. You’ll know their break even number and you can offer accordingly.”
Also, let the sellers talk first, and listen to what they’re saying. “Find out what their motivation is for moving,” Frie adds. “With that, you may be able to save some cash if their priority is time and not money, because they’ll take a lower asking price or may be willing to help with closing costs if you can close quicker.”
Winter can be a major bummer across most of the U.S. But it’s also time you can use wisely to grab a new home deal, ahead of the busy spring selling season.