Housing market: Real estate adviser details common mistakes sellers should avoid

Massachusetts Real Estate Advisor Dana Bull joins Yahoo Finance Live to break down the outlook on the Boston real estate market, how sellers can compete in markets, how buyers can stand out, inflationary pressures on home prices, and the Boston mayor's homeownership program.

Video Transcript

RACHELLE AKUFFO: If you're thinking about buying or selling your house in this hot market, we have some expert insight for you now. Dana Bull, Massachusetts Real Estate Advisor, joins me now. So, Dana, I want to first start with something that you said doesn't get as much attention, which is how sellers are faring in this market. So what do sellers really need to know about capitalizing in this environment?

DANA BULL: Yeah, so there's been so much focus on buying and how competitive it is-- but for sellers, I think they really need to recognize that it's still a super high seller's market, but the dynamics are starting to change. Buyers are a little bit more hesitant.

They're starting to tighten up their purse strings a bit because of inflation, because of the rising interest rates. So if you are a seller and you want to move quickly, it's really important that you're pricing your property right. It's OK to be aggressive, but you definitely want to be realistic about that price point.

The other thing is one of the mistakes I see sellers make is they're kind of skimping on the basics because it is such a seller's market. You still want to do your home prep, you want to put your best foot forward. But good news for sellers is if you have a unique property, now is still a great time to sell because with such limited inventory, buyers are looking at all of their options. So if you have an antique house, if you have a property that has deferred maintenance, now is still a good time to list.

RACHELLE AKUFFO: So then to that point that obviously if those sellers then end up becoming buyers, they might be looking for something themselves, we are think that the National Association of Realtors says that saving for a down payment, as Brad was just mentioning there, a lack of affordable homes, and a lack of homes that actually fit your criteria, your specific needs, as well as competing with multiple offers-- that those are the biggest concerns that homebuyers have. How are you seeing those trends play out in Boston?

DANA BULL: Oh, it is a really tough market. There's no way to sugarcoat that. The buyers that are having the most success are those that are able to be flexible-- whether that's around the property type that they're looking to purchase or whether it's expanding their geographical reach and targeting a wider net in terms of neighborhoods, and also being consistent.

I think that's really the biggest thing right now is buyers are experiencing this fatigue. They're putting their searches on hold. And whatever you can do to buffer against that fatigue and to continue to stay motivated to get out there and to be actively looking at properties and making offers, that's really separating people from those who are not having any luck to those that are ultimately winning in these situations.

RACHELLE AKUFFO: And how far have you seen some of these buyers go to really edge out the competition?

DANA BULL: So I know I've been hearing all these stories about lavish gifts that people are buying-- I'm not seeing a whole lot of that in this market. But I am seeing just people getting very aggressive around price and terms. And a lot of waived finance contingencies, a lot of waived home inspections-- I know there's a lot of cash offers going on, but I do want people to know that not every single property and multiple bid situation is being won and awarded to a cash buyer.

Again, it's that consistency of-- the main issue I see is if somebody has been searching for a year and they haven't been able to get something under contract, a lot of times it's because they maybe have only submitted one or two offers. And for lack of a better term, a lot of this is kind of a numbers game right now, where you do need to be-- there's some volume aspect to this.

RACHELLE AKUFFO: Now, I want to shift gears and talk about demographics here, because we've seen from a number of experts that millennials are really the driving force. Who are the driving forces when it comes to who's buying up the real estate in Boston?

DANA BULL: Absolutely. The millennials-- the demographic between 25 and 40 with that sort of sweet spot in the early-30s-- these folks are getting married, they're having babies, and they're also at a point in their careers where they're making money and they want to take that next step and put it into an asset like a piece of real estate. And that's where things are a little bit tough right now is we don't really have the inventory for what they're looking for.

Most of them want single family homes. And we have new construction being built that's a high end luxury price point that's out of reach. And then we have a lot of luxury townhouses. So where we're seeing hyper competition is in the established neighborhoods in the suburbs of Boston where you can find those colonial homes and that sort of thing. So definitely tough, tough area of the market for the millennial buyers.

RACHELLE AKUFFO: And it's odd, because for a lot of people, that first step in the American dream is securing a home of your own. And we did see that Boston Mayor Michelle Wu was proposing a $106 million investment for the city's residents to address the housing crisis, expand opportunities for people of color and first generation homebuyers to really build their wealth by trying to get into some better access to affordable housing. What are your thoughts on that and the difference that it could make?

DANA BULL: Yeah. So something that's interesting to note about Boston is our homeownership rate is lower than a lot of other cities across the country, meaning that many of the residents are renting. So it really starts with that. And our rental rates have also gone up significantly over the past couple of years.

So I think these affordable housing initiatives are incredibly important right now to keep people from being squeezed out of their neighborhoods. We'll have to see if this is enough to really make a dent. But I think if we can raise awareness that some of these programs are available and exist, are going to set the wheels in motion for people to apply. And even if they don't end up qualifying for these specific programs, they can start thinking about what steps they need to take to make homeownership a reality, whether that's moving a little bit outside of the city or whether that's buying a smaller condo-- it's something I think that will be a catalyst for a lot of people.

RACHELLE AKUFFO: Well, we certainly hope so. Thank you so much, Dana Bull there, [INAUDIBLE] advisor. Thank you for your time.