buying-a-home-in-an-inventory-droughtThinking of buying a home this year? If so, the odds are good that you’re noticing a lot fewer homes listed for sale in your market than you may have seen in the past. Listed inventory on the massive Realtor.com site is about 16 percent lower than it was a year ago and about 38 percent lower than two years ago. In fact, it’s been eight years since inventories of homes for sale have been so low.

Slim pickings are changing the dynamics between sellers and buyers. When there aren’t many homes on the market from which to choose, buyers have few options—and more chances to make a big mistake by overpaying for a house or settling for a home that they don’t really like.

On the other hand, this is the time for you and your family to decide together what you really do want in a new home in terms of location, size, and amenities. Before you start looking, make a list of must-haves and would-be-nice-to-haves, as well as things that are not essential. This may be the most important purchase you will make in your lifetime, and making a mistake will either cost you a great deal of money or cause you a great deal of regret.

Six tips for house hunting in an inventory drought

1. Scour the listings. Use several good listing sites, not just one. Make sure at least one is a broker’s site, preferably one of the dominant brokers in your market. Sign up to be alerted whenever a new listing is posted in the neighborhoods you are considering.

2. Expand your scope. Can you add some territory to your house-hunting locations? The wider your search, the more houses you will be able to consider.

3. Hire the number one buyers’ agent in your market. Real estate agents specialize by territory and by skill set. Some specialize in short sales and foreclosures, while others specialize in distress sales. Realtors who are certified buyers’ agents can use the Accredited Buyers’ Agent designation (ABR). Hire a buyers’ agent who has access to new listings in your target area before they are posted by the MLS.

4. Go to open houses. Try to meet other agents active in your target area. They are likely to know of listings before they hit the Internet.

5. Don’t get turned off by a poorly created listing. At best, photos and words convey only a general sense of what a house is like. At worst, they can turn you away from a property that just might be the right one for your needs. Look at listings with a critical eye. If the property has the basics you seek, visit it. Badly done listings often keep great houses from selling; by doing due diligence, you just might find a hidden gem.

6. Give yourself plenty of time. With the onset of the spring buying season and increasing prices, inventories have been rising lately. Total housing inventory at the end of February rose 9.6 percent to 1.94 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace. This is up from 4.3 months in January, which was the lowest supply since May 2005. With economists predicting improving prices, more and more sellers are likely to list their homes through the spring and early summer months.

Start looking early, and look at a lot of homes. Be patient as more homes come onto the market. Keep looking for the right house until you find it, and don’t compromise by stretching yourself too far financially or not getting what your family needs. The market should continue to improve, and more homes will be available next spring.

Steve Cook is Executive Vice President of Reecon Advisors and covers government and industry news for the Reecon Advisory Report.

During his 30 year career in public relations and journalism, Cook has been a print and broadcast news correspondent, served two Members of Congress as press secretary, was a senior executive in the world’s largest independent public relations firm in Washington and Chicago and was vice president of public affairs for the National Association of Realtors from 1999 to 2007.At NAR, Cook supervised external communications including news and editorial coverage, video production, speech writing and communications strategic planning. He helped to manage NAR’s multimillion dollar network advertising program.

Cook is a member of the National Press Club, the Public Relations Society of America and the National Association of Real Estate Editors, where he served as second vice president. Twice he has been named one of the 100 most influential people in real estate. He is a graduate of the University of Chicago, where he was editor of the student newspaper. In addition to serving as managing editor of the Report, Cook provides public relations consulting services to real estate and financial services companies, and trade associations, including some of the leading companies in online residential real estate.