Is it too late for lowball offers?
Lowball Offers Fade as Housing Inventory Falls
If you're considering buying a home in Sarasota, Florida, it's unlikely you'll get away with a lowball offer this year. Realtors are reporting that they're no longer seeing the same number of "lowball" offers they saw a year ago. A lowball offer is a price proposed by a buyer that is 25% or more below the property's list price. When there’s an excess of properties available and values are low or uncertain, lowball offers spike, because homebuyers and real estate investors gamble that they might get lucky.
In March 2011, one out of ten real estate agents and brokers complained about lowball offers, according to the National Association of Realtors (NAR). But in the latest NAR monthly survey of 4,500 members, almost no complaints about lowballing showed up. Agents and brokers have shifted their focus this year to declining inventory levels.
With prices slowly rising and inventories slowly declining -- especially in healthy real estate markets like Sarasota -- lowball offers are unlikely to be the winning offers in 2012. In fact, in markets where supply is tight and attractive properties are getting multiple offers, buyers looking to "get lucky" are ending up out of luck all together. It's starting to turn into a sellers' market where lowball offers get ignored.
Real estate home sales in March 2012 in Sarasota County outdid sales for any single month in the previous seven years, according to the Sarasota Association of Realtors (SAR). The median price for a single-family home in Sarasota climbed to $174,900, a 10% jump over March 2011. (Nationally, the median home price was up 2.5%.) 831 properties were sold, bringing the existing home inventory level in Sarasota down to 4.8 months. Inventory level is measured as amount of time it would take to sell all current listings at the current sales pace if no new listings became available. Normally, a 6-month level represents a market in equilibrium between a buyers' market and a sellers' market, so we are moving now into a sellers' market.
While lowballing is becoming an unsuccessful strategy, the good news is that it isn't necessary. Prices on homes for sale in Sarasota, while slowly rising, are still far below pre-recession levels, and mortgage rates are still near an all-time low. It's the perfect time to consider buying a property in Sarasota.