We've been in the field lately showing a lot of property & viewing the exact inventory of today's market and here it is: it's tough out there!
There aren't many homes available on the market in the Madison & surrounding areas in all price points. The homes that we are seeing today are, largely, in need of updates. The updating amounts vary from simply needing new counters and cabinets to refinishing floors, gutting bathrooms & changing out dated light fixtures.
Today's market is priced for a seller's market. Here is what we explain to our buyers to help them understand how the market works: all homes have a higher value in a seller's market. It's simple supply & demand.
So what's a buyer to do in a seller's market? Buy high, renovate & then hope to sell high again? Ideally yes, but remember, there is a 'cap' in each neighborhood, otherwise known as a 'not too exceed' value. I recently showed a family a variety of homes in a variety of neighborhoods, many of the homes were dated. One of the very first questions they would ask when we walked into a home was "How much can we spend in this house without over-improving for the neighborhood?" This is the SMARTEST question that a buyer can ask. It's important to have a home you love & make any and all improvements, however, a home owner has to be educated as to what their neighborhood can withstand. With that knowledge, I then say to that home owner "Do whatever makes your happy!" The worst situation is when a client says to us "We didn't realize that we put too much money into the house & now we can't get it out."
So what else can a buyer do in a seller's market? Buy high for a renovated home and be one of the more expensive homes in a neighborhood? Possibly. It depends on your priorities as a buyer. Does the thought of a renovation have you panicking & sweating already? If so, this may be the best route for you. If not, I revert back to the previous paragraph.
Wait, are those the only options for a buyer in a seller's market? No, here's the one other: wait for the diamond in the rough. Remember, everyone else is waiting for that one too.
So what are many buyers doing in this market? Building. Build a home in a newer neighborhood, build a middle of the road-priced home & keep it updated. Know that if you throw in the most expensive features, you may not get them out.
So if you're a considering selling your home, what should you do? First, and foremost, get a qualified realtor to come over & give you a Comparative Market Analysis. This will tell you the value of your home in today's market. We often give our clients 2 prices: 1 if you update your home & 1 if you sell it in the current condition. These can be 2 vastly different prices.
Our past clients often ask us to come over & give advice on updates that they should do that will give them the maximum return on their investment & we are happy to offer this service to our clients. It's so important to get the most out of your home while you're living in it & when you go to sell it. (Spoiler alert: update your kitchens & baths!)
If you choose the update route you can command a higher price & possibly a greater profit. This is a great option if you make smart choices when updating. Don't forget to update prior to moving so you can enjoy the updates that you do make.
The other option: do nothing. Leave your home the way it is, sell when the market is good & potentially make a respectable profit.
THE BEST SOLUTION IS EDUCATION
The best solution for buyers & sellers: educate yourself before you begin your search or your listing. Understand our market, talk to a lender to learn about your financing options, because you may want to take out a HELOC (Home Equity Line of Credit) to make updates to the house. Then get out and see what's there. Know that new homes hit the market constantly in the spring & it slows down later in the year.
THE BOTTOM LINE
You need to work with a realtor who understands the market, the inventory, the pricing - regardless if you are buying or selling a home.
If you're looking into either or both options, please reach out. Remember, it's ideal to reach out well in advance of your timeline. This will give you adequate time to prepare, meet with qualified professionals (realtors, lenders, financial advisors, CPAs, etc...) to make sure you're making the smartest investment for you and your family.
Happy Spring Market to all & may the odds be ever in your favor!