Low housing inventory frustrates homebuyers

Q: I read your article in the paper. We have been trying to buy a home for six months, but have always lost to bidding wars.

We are looking for a single-story, three-bedroom, three-car garage home with a pool, if possible. We need it to be within a 12-mile radius of the Silverton, for about $250,000. We can put 20 percent down, with good credit. We now live in Lake Havasu, Ariz. 

We have found  homes, but lost to higher bidders. It’s just not fair. One home we found for $225,000 and tried to buy it. The very next day, the seller countered for $10,000 more than he asked for one day earlier. 

What a bunch of bull. Anyway, we agreed to pay the $10,000 more, but we still lost to a higher bidder. Someone should talk to a commissioner and stop this ridiculous practice. What is your take on this problem?

— Delbert M.,

Lake Havasu, Ariz.

A: At the risk of sounding like one of our former presidents, let me start by saying I feel your pain.

Unfortunately, the frustrations you’re running into competing with cash buyers and multiple offers to purchase a home in our supply-starved local housing market are all too common. As a Realtor, I hear such comments every day.

The biggest reasons for this are the very tight local housing supply we’ve been dealing with for more than a year now and the continued dominance of cash buyers, most of whom have been buying homes here to rent out because they see it as a great investment.

For months, we’ve been dealing with about a five-week supply of existing homes available for sale. In a normal market, we’d have at least a six-month supply.

I wish we had more homes to sell to people like you. This lack of available homes to sell to traditional buyers is probably the biggest issue we’re facing right now in the Southern Nevada housing market.

Just as unfortunately, there are no easy solutions.

The old saying “cash is king” has never been more true than in today’s housing market. Statistics from the Greater Las Vegas Association of Realtors show that cash buyers have accounted for more than half of all local existing home sales since the beginning of 2011. This percentage has actually been climbing in recent months, peaking at nearly 60 percent in February.

All things being equal, banks and other sellers will generally accept a cash offer over one involving financing.

As a buyer requiring a mortgage to purchase a home, you can improve your chances by preparing yourself to act fast and by making more aggressive offers, often above the asking price.

It’s also important to work with a good and experienced Realtor, someone you feel comfortable working with who has demonstrated the work ethic and knowledge it takes to find the right home for you in today’s highly competitive market.

Years ago, we would work with buyers who would find a home they like and ask for a few days or a week to think about it. When you find a home that you like today, you have to be ready to buy it that day. If you don’t act fast, someone else will.

You also can look at new homes being built by local builders. If you’re interested in a new home, and don’t mind paying a bit more, you may find a more plentiful supply and less competition from cash buyers.

Beyond that, hang in there. You may have to make 10 or 12 offers before one is accepted.

But I’ve found that if you’re prepared and persistent, you’ll eventually find a home.

If you have a real estate question, email me at ask@glvar.org.

Dave Tina is the 2013 president of the Greater Las Vegas Association of Realtors, and has worked in the real estate industry for more than 35 years. GLVAR has more than 11,000 members. Email questions to ask@glvar.org. For more information, visit www.lasvegasrealtor.com.