2021 Real Estate Market: Understanding the Second-Chance Buyer
In today’s real estate market, home prices are through the roof (pun intended).
The current national median price is $350,300 — that’s about 24% higher than last year, according to data from the National Association of REALTORS®. Low housing inventory and high buyer demand are keeping things competitive, with the typical home selling in about 17 days and receiving multiple offers.
While this is great news for sellers, it’s putting many buyers in a tough spot.
Suddenly, homes that were listed for $300,000 last year are selling for $400,000. A buyer who saved and got pre-qualified for a $300,000 home might struggle to find a property that meets their needs and price point.
These conditions are creating what NAR Chief Economist Lawrence Yun calls an “army of buyers” waiting in the wings. In Brian Buffini’s Bold Predictions Mid-Year Update, Yun explained that the buyers who have been shut out of this current market are eager for a second chance and ready to act should prices drop.
“They have been outbid, and they are frustrated they cannot get into the market,” says Yun. “But if home prices were to decline, they are ready to move in.”
These “second-chance buyers” will likely become a major part of the marketplace should prices cool later this year. They are also going to protect the housing market from any drastic price declines, since these buyers will drive a second wave of demand, according to Yun.
There are a few ways real estate agents can prepare to support these second-chance buyers both now and later once they are ready to buy:
- Keep in touch. Just because these buyers aren’t acting now, doesn’t mean you should ignore them. A great way to keep in touch is by sending home price updates — notify clients about any drop in prices and let them know when conditions are beginning to shift.
- Become a trusted advisor. Establish yourself as a trusted advisor to help buyers make sense of the crazy market. Make yourself available to answer questions on current conditions and provide guidance that will help them when they are ready to buy.
- Send consistent value. Naturally, you’ll want to mail or email market updates, tips for first-time buyers and other helpful real estate information. However, to really stand out, consider sharing additional information on subjects outside of real estate: think home improvement, financial management, personal growth, cybersecurity and more.
- Build your skills. Although things are busy, make sure you’re taking real estate training courses now to build your skills for later. These second-chance buyers will be coming in hot should prices level off, so make sure you can masterfully facilitate the transaction.
For exceptional real estate training that drills into the fundamentals, check out Buffini & Company 100 Days to Greatness®. If you’re a new agent or simply looking to refresh your foundation and maximize earning potential, this course is for you. Take 100 Days to Greatness online today or ask your broker bring it to your office!
Eric
