5 Ways To Find Homes For Sale In A Low Inventory Market

In the recent years, with the Covid-19 pandemic hitting the world, many people were left uncertain about their futures. With most people working and learning from home, some losing their jobs, businesses closing down and similar incidents, the uncertainties of the future left people unsure of how to proceed with their plans for the future. When it came to the real estate market, most people were unwilling to sell, unsure of how the market trend would change. This unwillingness to sell properties, created a low housing inventory market, which affects both buyers and sellers alike, and those looking for a low price house for sale in Sri Lanka, will find it very difficult to find something suitable.

What is a low housing inventory market?

A low inventory market means that there are no sufficient houses on the market for sale. When this happens, sellers tend to ask for higher prices, which buyers are not willing to pay, and this causes a stagnation in the market, with unsold real estate. For those who have a greater need for buying a home or land, will tend to pay much higher prices for a house for sale in Kandy, Colombo or anywhere else, than during other times. This also means that when the inventory of housing is low, unless buyers offer higher prices, they will lose out on making a purchase.

Things that impact the housing inventory

There are many factors that have a profound impact on the housing inventory. These include:

● Uncertainty of the future: Incidents in the recent past, both locally and globally, have created a lot of uncertainty among people. In addition to this, the Covid pandemic too is still not at an end, which causes even more questions about the coming months and years. Economic instability and so many other factors have changed the way people are thinking and planning for their futures. These also affect the decisions they make regarding real estate, both in terms of buying and selling.

● Increases in interest rates: In the recent past we have seen borrowing interest rates skyrocketing while people’s incomes remain passive. This means that those who want to borrow money for buying or building a home are paying far more for each rupee they get than they would have done in previous years. Due to this, many people will think twice when it comes to borrowings, and this will greatly impact the real estate market.

● Costs and supply chain disruptions: It is no secret that prices of construction materials have increased by a huge percentage, and there seems to ne no end in sight for it in the near future. In addition, supply of certain commodities and products required in the construction industry, especially those that are imported int the country, have seen a huge reduction in quantities, with many items not being available in the market. These factors too will affect decisions of those who want to either buy or sell housing or land.

How does a low housing inventory affect the real estate market?

This shortage of housing in the market affects the real estate industry in many ways.

● Seller’s Markets: Unlike in a buyer’s market where land buyers can enjoy greater choice and bargaining power, a seller’s market means that they have few options when it comes to purchasing a property. It also means higher prices as well as bidding wars between buyers who are competing for the same piece of real estate, which will in turn drive prices even higher.

● Increased prices: When there is a low supply of homes for sale, but the demand remains constant (or increases), the laws of economics come into effect, driving property prices sky high.

● Less contractual protection for buyers: When several buyers are competing for the same piece sof real estate, some may be willing to forego certain matters like proper home inspections, demanding repairs to be conducted etc, in order to win the bidding war. This means that they may be paying a high price for a piece of real estate that may have problems in the future, coting them even more money in time to come.

How can property buyers find suitable real estate during a low inventory market?

While it is difficult locating the ideal property for your needs during a time like this, especially when the options available seem to be so low, there are still a few ways you can locate a good house or land for your needs. Here are a few tips you can follow.

● Consider rental property: If the options are low for purchasing a home, then you should consider renting, at least for some time until the uncertainties in the market are resolved and housing inventory rises. In addition, some rental property owners may even be convinced to sell, since they will find that there is a low demand for renting their homes during a time like this.

● Expired listings: If you can find online listings for houses that have been closed because the seller was not able to find a suitable buyer, you may be able to locate a good home at a reasonable price. Speaking to these former sellers and explaining the current market situation, may convince them to rethink their decision and put their property on the market again.

● Search for those people looking downsize: Many people consider downsizing their homes when they retire, or come to a certain age or are facing certain financial difficulties, and this is the ideal opportunity for those looking to buy a house. When they realise that there is a possibility of getting a buyer for their property, they may take you up on your offer.

● Work with an experienced realtor: Real estate companies in Sri Lanka have many contacts in the industry and will be able to find you a suitable home or land according to your needs, much faster than you will be able to do it yourself.

● Real estate investors: There are those who like to invest in real estate, and such people may be considering putting up a few of their properties for slae. Try contacting people like this and see if they will have a suitable house which they are willing to sell.