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Military & Veteran Home Selling Resources

How to Thrive in a “Low Inventory” Market, Whether You’re Buying or Selling


We’ve mentioned the current  “low inventory” market before, but what does that mean? Specifically, what does it mean for you if you’re making a PCS move and need to buy or sell a home quickly? Let’s take a closer look at the definition of the term and how it applies to your home buying prospects.

Inventory refers to the number of listings currently for sale. It’s measured in terms of “months supply”: active (housing) inventory vs. the last 12 months’ worth of homes deemed under contract (sold). This is also known as the “absorption rate.” So if there are currently three homes on the market and an average of one home is sold each month,  you have a three-month inventory in that market. 

Historically, six months of supply is considered “normal.” 2021’s inventory is the lowest it’s been since the National Association of REALTORSⓇ (NAR) began tracking the single-family home supply in 1982, starting the year at 1.9 months. 

One reason is a slowdown in new construction. “Building has slowed because of supply chain slow downs — meaning everything that goes into new homes from lumber to carpet,” points out AMS’s Chief Marketing Officer Rob Greenbaum. 

Other factors include the economy, consumer confidence, interest rates, employment and time of year. Plus, fewer people are listing. Some are hesitant to have strangers come inside while COVID-19 cases are still on the rise; others worry about finding a new home in such a competitive market. “With so many people still working from home, we’re seeing many people take out a loan to improve the home they have rather than sell,” says Anthony “TJ” Powell, Executive Vice President of AAFMAA Mortgage Services LLC (AMS).

At the same time, near historically low interest rates are spurring many renters to buy, adding to high demand. In other words, in 2021, we have more buyers chasing fewer listings and those listings are going up in price. In nearly every metro area NAR tracks, housing prices increased during the first quarter of 2021, with 89% of metro areas seeing double-digit price gains.

Tips for Buyers

In the current market, you may find fewer options and you might have to bid against other buyers for nicer homes in your price range. While cash offers are preferred by some sellers, many AMS Members will need financing. If this is the case for you, Jeff Havener, AMS President, advises you get pre-approved. “A pre-approval shows the seller you’re serious and already have a lender that thinks you will qualify for the loan,” he says. 

When you find a home you love, you’ll want to make a decent offer or even one above the asking price. Your real estate agent may also have other ideas of what to include in the offer based on conversations with the seller or their agent. For example, a fellow servicemember may be swayed by a “love letter” from you about your career and family. Or if the seller is hoping for a fast close, you can ask AMS if we can close your loan quickly in 20-25 days. But don’t skip the home inspection to appease a seller, unless you really need to be more competitive with your offer. “You should always have a home inspection, especially if you’re a first-time buyer, so you know what you are getting into because some problems are costly to repair,” says Kevin W. Holton, Vice President of Sales at AMS.

Tips for Sellers

If you’re selling your home, the ball is already in your court, so to speak, but there are still some things you can do to ensure a smooth transaction. First, if you need to sell quickly, get a pre-listing home inspection ($350-$1,000) to check your home’s major systems, mechanicals, windows, and doors as well as note any signs of water damage, mold, or cracks in the home and foundation. “If there are issues, you can have them fixed and mention them in the home’s sales description,” says Powell. “This is a plus for many buyers.”

Then, price your home competitively based on recent sales (your real estate agent can help with that). Then sit back and get ready for action, especially during the first two weeks (if you’re even on the market that long!). Greenbaum, who sold a house in Ashburn, VA in 2020, had 26 showings on the first weekend the home went on the market and, by the following Monday, had 11 offers. “We wound up accepting an offer that was over the list price,” says Greenbaum.

If you have several offers, don’t assume the highest is best. The “best” may be someone who has gone through the house several times, is pre-approved for a mortgage, and seems like a “good fit.” Also consider, if your home sells faster than you anticipated, do you have a place to go? You may need to rent-back or stay with family or friends for a while.

We’re Here to Help

If you’re not certain about whether or not it’s the right time to purchase a home, or refinance your existing mortgage, please contact AMS online today or give us a call at (877) 387-6856. 

One of our Military Mortgage Advisors, who are licensed Mortgage Loan Originators, will provide you with an honest and fair comparison of your mortgage options, including a wide range of low-rate and low-cost mortgages designed to meet your needs.

Ensuring existing and prospective AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today!