Getting real Tight housing market presents many challenges BY CINDY GERLACH
76 GREATER LAFAYETTE MAGAZINE
STOCK PHOTOGRAPHY
If you are hoping to sell your house, good news: It’s a great time to put your house on the market. But if you’re a first-time home buyer, be prepared. It might be tough for you to get your offer accepted in a tight market. Properties that are priced in that “sweet spot” — properly priced and in reasonable condition — are seeing single-digit days on the market and multiple offers, says Charlie Shook, broker and co-owner of Coldwell Banker Shook. Right now, that “sweet” price is from $150,000 to $350,000. Prices that might have once been considered fairly expensive are now seen as the norm. It’s a reflection of the economy, of supply and demand. “It sounds exciting, but it’s really just a reaction to the economy,” Shook says. “Brokers don’t want that. It makes prices go up. There are more buyers than product.” Inventory in Tippecanoe County is at historic lows, says Stacy Grove, a broker and owner of the Russell Company. On one day in early March, active listings for single-family houses were at 67. But when filtered for those that had offers, that number dropped to 46. Of those listings, 12 were in West Lafayette. The prices ranged from $79,900 to $1.5 million. And of those 46, only 19 listings were under $300,000. “People don’t understand the crisis that is our inventory shortage,” Grove says. “We just don’t have the new construction to back up the inventory demand.”
For sellers, this means a potential profit. People used to have to hold onto a house for several years before they could see making any money with a sale; now, Grove says, properties can appreciate up to 1 percent a month; one need only own their home for a short time before they can recoup their costs and see a return. For those trying to buy their first home, the process might be an arduous one. Most listings for houses under $300,000 are seeing multiple offers, many above the asking price. “We’re seeing multiple offers over the list price,” says Grove. “The list price used to be our ceiling, now it’s our floor.” Buyers are waiving inspections and writing offers without contingencies. Some buyers are able to write cash offers, getting temporary loans to avoid financing. And they are adding what is known as an escalation clause, offering to beat the best offer up to a certain amount. “It’s a valid strategy,” says Shook. “Those intangibles are becoming more and more popular.” And when prices are not reflecting the appraisal, buyers are offering to pay the difference in the appraisal gap, says Grove, essentially taking an advance on their equity. “It’s the Wild West out here,” Grove says. “It is crazy.” Thus it’s a great time to sell your house — if, that is, you have someplace to go. Because the story for buyers, especially first-time buyers, is not so rosy.
GREATER LAFAYETTE MAGAZINE 77
