I just got back in the office from a meeting with a 94-year-old ex-realtor because I had an offer on her condominium. She lives in assisted living and I always bring her cookies from Ruby Snap, which she adores. I've been in the real estate business for 32 years and she, too, was in it for decades. We both lived through markets where interest rates on home loans were 18 percent (mid-1980s) and seller's markets in the '80s, '90s and 2007. And we had to laugh because we are currently experiencing yet another seller's market.
What's a seller's market? In real estate, it's a phenomenon when the inventory of homes and condominiums is very, very low and there's nothing to buy. It's like walking into the men's section of GAP and only finding three pairs of green khakis size 44/34, you're a 30/28 and want blue denim. Why is it a seller's market? There are many reasons: 1. after the crash of 2008, people were terrified to ever move again; 2. demand is higher than supply because Utah is seeing a huge growth in jobs and businesses moving in (most counties); 3. investors have been buying up short sales and foreclosures like mad throughout the state since the 2007 crash as rental inventory, and 4. parents have been seeing an influx of grown children moving back into their homes because affordable rental housing is hard to find. Oh, and speaking of rental housing, my property manager friends ensure me that we are really low in rental possibilities, too, in Salt Lake City. Luckily, the flux of students moving in and out of rentals around the semester endings and beginnings allows for more units coming and going than the overall vacancy rate of 3 percent (meaning 97 percent of rentals are rented).
What happens to buyers in a seller's market? They are ran over, beaten up and walked on. To win the game, buyers will need to be aware that any "good" property that hits the market will generally have multiple offers within a day or two. Unless you can pay all cash for a property, you better be pre-approved with a local lender. The more earnest money (think "deposit") you're willing to throw up-front at the sellers, the better. Having your financials in order and having that pre-approval letter in your fist to wave at the seller is absolutely mandatory. And write a letter to the sellers to accompany your offer. Include a photo of you and the dog, or you and the kids. In multiple offer situations, you'll have to present your "highest and best" bid, and sometimes just the photo of that eight-toed cat of yours might win you the house.