Anyone who reads the press will know that the current sentiment around the housing market is probably best described as extremely positive.
To provide some context around this sentiment, CoreLogic indicated that national house prices experienced a monthly rise in February 2021 of 2.1%.
A monthly increase at this level has not been experienced since 2003, approximately 17 years ago. If this level of growth experienced in February was to continue for the next 12 months, it would represent a price increase of around 24% over the coming year. Whether this level of growth will, or will not, continue is not the core intention of this conversation.
What is worthy of conversation however is how you can mitigate your risk of paying over market value in conditions that could be currently described as “euphoric” in certain segments.
Let’s cut to the chase, an almost perfect set of conditions currently exist to encourage the market to pay a little extra to secure their preferred real estate asset. In some instances, this will be perfectly fine, but when a FOMO mentality takes over, logic can often take a backseat. Things become challenging when the market is simply prepared to pay whatever is required to win, even if that value ends up being dislocated from reality. In such instances, current victories may not taste quite as sweet in the future.
This is where an independent buyer’s agent can really assist. But not just any buyer’s agent, one who genuinely understands research, and uses tools like modern AVM’s combined with their own experience, to avoid the potential pitfalls of purchasing in FOMO conditions.
Like any computer-generated outputs, AVM reports are only as good as the quality of information that is fed into their system initially. But in the hands of an experienced buyer’s agent, they are an incredibly valuable tool. They provide the basis to start a conversation around property values that are still grounded in some market realities.
In FOMO market conditions, investing in the services of a buyer’s agent is a small price to pay; they may end up being your only real ally. Think of the investment in a buyer’s agent as a mechanism to protect the sweetness of your current victory for well into the future!