Burlington’s real estate market has a problem: not enough people are selling houses.
The lack of homes on the market, combined with a steady desire to purchase homes, has created an environment that heavily favors sellers.
“The number of offers coming in on new listings, the short time from listing to actually closing it, I mean you are seeing some rapid things happen,” said John Salvador, the principal broker in Century 21’s Burlington office. “But there is a shortage.”
Burlington’s stock of available homes on the market typically hovers around 200, but in recent months that number has been closer to 65, driving higher asking prices and, in return, higher offers from potential sellers.
Despite the lessened availability, home sales this year are not far off from what they were last year. In the first five months of 2021, 248 homes were sold. That number fell slightly to 242 over the same five-month period this year. The average price of a home increased by more than $25,000 during that time.
Andy Crowner, the principal broker at Remax Real Estate, said 65 homes may sound like a lot until you consider what kinds of homes someone may want to purchase.
As of Thursday, for example, there were only eight three-bedroom homes with two-car garages in Des Moines County listed for between $150,000 and $200,000 on the market.
Crowner said the imbalance of homes for sale and potential buyers can create a cycle when there aren’t enough homes. As of late, homes don’t sit on the market for long, with many selling in just a few days, and new listings sometimes are sold before they even appear online. Sellers may be more than ready to leave their homes, but they have to have somewhere to go before they put their home on the market.
This lack of housing stock has caused a big change in dynamics for buyers and sellers. Buyers are the ones needing to be more aggressive to get the homes they want, while sellers have more options.
What homebuyers can do to get ready to put in an offer fast
When looking for a home, Crowner suggested homebuyers get preapproved for a loan and apply for government grants, if they are eligible, to help with the down payment, so they are ready to go when they start looking for homes.
The Iowa Finance Authority offers down payment assistance to Iowans who meet certain income requirements for homes purchased within a set price range.
Once they’ve found their dream home, Salvador said, he’s been encouraging buyers to be more aggressive with their offers. Salvador said he has seen more offers closer to, or occasionally even over, the listing price over the past year.
Tips for sellers
For those looking to sell their home and buy a new one, Crowner recommends that prospective sellers meet with and interview real estate agents. Salvador has been spending time talking with his sellers to make sure they are getting the best asking price they can.
“At the same time, don’t get crazy,” Salvador warned.
Once a seller has offers on the table, Salvador has been encouraging them to carefully consider their offers before making a decision on which to accept.
Another key for potential sellers is remembering that buyers are looking for homes everywhere.
Crowner said as many as 90% of home buyers look online first, with about 50% having seen the home they will eventually purchase online before they see it in person.
While online listing sites are common places for photos to show up of homes for sale, Crowner said it is important that sellers should not discount the value of social media sites like Facebook and TikTok. He said videos and 3-D walkthroughs can also be helpful in getting a home sold.
“Consumers are on their phones all day every day, and your home needs to be on the apps they are using,” he said.
Earlier this week, the federal government announced that it will increase interest rates by 0.75%, the highest increase in more than a decade. Salvador said he’s not concerned how it will impact southeast Iowa’s housing market.
“It is still a good time to buy a first home,” Crowner said.