A nurse just discovered she’s pregnant with her third child -- a welcome surprise for her and her husband, a software developer. But in planning for a larger family, the couple feels the urgent need to leave their tiny gray bungalow in favor of a much more spacious house.
“We have a narrow galley kitchen, a little one-car garage, no playroom and three tiny bedrooms -- including one we use as a home office. Our two little boys are super active, really climbing the walls. We have no idea how we’ll accommodate the baby girl who is due to arrive this summer,” the nurse says.
She and her husband bought their gray bungalow back in 2018, before the pandemic hit. They’d hoped to transition to a much larger place before now, but with the rise in mortgage rates, the math didn’t work for them. Only recently, with a moderation in rates, did the numbers convince them they should get off the sidelines.
“Our hope is we can move to a much larger space within the same neighborhood. Our kids are thriving in the schools here, and the neighbors are friendly. That’s why we’re focused on finding a big family property we hope some empty-nesters will sell,” the nurse says.
From a housing standpoint, the couple -- both in their early 30s -- say they are at a crossroads and must move in 2024. The same is true of many other young families who have outgrown their homes. Economists now predict a rise in home sales this year, up from the low volume registered last year.
“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” says Lawrence Yun, chief economist for the National Association of Realtors (nar.realtor).
Dorcas Helfant, a past president of the association, doesn’t know the couple in this true story. But she says this could be an excellent time for them to fulfill their vision.
“For years, many suburban areas have been extremely short of the kind of houses young families desperately seek. Older houseowners, especially those locked in with low-cost mortgages, have long faced an undersupply of inventory. But that’s gradually changing as more baby boomers are downsizing,” Helfant says.
Here are a few pointers for young families aspiring to increase their living space:
-- Shop for highly motivated sellers.
Though it comes as a surprise to some move-up buyers, the owners of large properties are no different from any other category of sellers. Some are a lot more driven to sell than others.
Some owners have no particular timeline pushing them out the door. Such discretionary sellers would like to liquidate but are willing to delay their plans in hopes of obtaining a better price later.
Conversely, motivated sellers have well-defined reasons for moving. Besides financial and health issues, there are positive reasons people must sell quickly. Perhaps they’ve gotten a better job in another city or are transitioning to a custom-built home.
As a move-up buyer, why should you care if the owners of a home you like are in a rush to sell? Because hurried sellers are much more likely to negotiate in earnest.
If you question sellers on their reasons for moving, many will give you or your agent candid answers to polite inquiries.
Helfant says it’s often pointless trying to negotiate with sellers who convey a couldn't-care-less attitude about their timing. You’re much more likely to strike a favorable deal with people who truly wish to move.
-- Don’t exclude from your search properties that have gone “stale.”
On occasion, genuinely motivated sellers hold out longer than they should -- reducing their overly high list price only after becoming desperate.
“Even in premium neighborhoods, people who overshoot on price and then fail to sell for many months can be forced to drop their price below market value after buyer interest drops off,” Helfant says.
Their problem is that homes which linger too long on the market become stigmatized.
“It can take a while for some otherwise motivated homeowners to realize they’ve been asking way too much. But if you’re willing to wait, you might be rewarded for your patience,” Helfant says.
-- Consider a counteroffer if your budget allows.
Multiple offers are still common in popular communities -- where buyers continue to rule. But Helfant says you can usually be more aggressive when negotiating with sellers in an area with lots of homes for sale.
“You’ll do better if there’s a great deal of inventory, which translates to more competition for the sellers,” she says.
-- Stay focused on your long-term goal.
Among those hoping to take advantage of more moderate mortgage rates to better their housing situation are affluent people. Such buyers often want such luxury features as elaborate gardens, at-home fitness centers and large, customized garages to house motorcycles and sports cars.
Getting a good deal is always a positive for buyers. But for wealthy buyers of any age, acquiring the exact place they want can be even more important.
“Remember, when you trade up, you’re buying for lifestyle. You’re looking for that perfect location, that perfect view or that perfect refuge from the world where you can find peace. So it’s more than just the price that counts,” Helfant says.
(To contact Ellen James Martin, email her at email@example.com.)