Homebuyers and sellers are not on the same page when it comes to the state of the housing market, according to Redfin real estate agents across the nation. Redfin (www.redfin.com), the customer-first real estate brokerage, today released its latest quarterly survey of more than 700 agents, who report that an increase in the number of homes for sale hasn’t been enough to bring buyers back to the market: Affordability and financing hurdles are now holding them back. And sellers are slow to catch on that the market is shifting away from their favor.
“In May, 40 percent of sellers surveyed by Redfin said that they planned to list their homes above market value even though home sales had dropped by 9 percent since the year before,” said Redfin Chief Economist Nela Richardson. “Typically it takes sellers six to nine months to adjust to a price change, but this latest shift is longer. Prices have moved down and then up so much over the past five years that it’s even more difficult for sellers to have a realistic baseline for what their homes are worth in the current market.”
And the mindset of buyers has shifted significantly since last year, Richardson said.
“Buyers who have been searching for a long time may still try to win deals with aggressive offers,” she said. “However, new buyers in the market are much less willing to chase an escalating sale price to compete with multiple bids. The demand side of real estate is moving from ‘please take my offer’ to ‘take it or leave it as you please.’ Homebuyers’ willingness to walk away from a deal that’s a bad fit is good for them and is ultimately healthier for the housing market.”
Across Redfin markets nationwide, just 24 percent of agents surveyed told us that “sellers have all the power” in their markets, down from 35 percent three months ago. Sellers have lost the most ground in Midwest markets such as Chicago and Minneapolis, where only 12 percent of Redfin agents now think sellers are holding all the cards, down from 24 percent last quarter. In both the West and Northeast markets, 30 percent of agents said that sellers still have all the power, but that was also down from 38 percent and 33 percent last quarter, respectively.
“Last year in Chicago, the pendulum swung completely toward sellers in terms of the ability to price high and sell fast,” said Redfin agent Dario Medina. “This year, things feel closer to normal. The downtown condo market has really opened up with lots of new inventory, but new, single-family construction in the best school districts still gets snapped up quickly. But on the whole, things seem to be much more balanced than they were last year.”
Other key findings:
- Forty percent of agents polled said that now is a good time to buy, down from 46 percent last year.
- Seventy-six percent of agents indicated now is a good time to sell, compared with 86 percent last year.
- Some of the increasing challenges for buyers, according to agents, are qualifying for mortgages (indicated by 16% of agents vs. 8% at the beginning of the year), saving enough for a down payment (18% vs. 11%), and worries about the economy (12% vs. 6%).
- Across Redfin markets, 8 percent of agents reported that “many more” buyers are interested in homes in urban areas compared with last year, with strong urban interest among homebuyers reported by agents in Portland, Oregon (19%), Dallas, Texas (14%), Denver, Colorado (13%), and Washington, D.C. (13%).
- With current interest in the role of the millennial generation on the housing market, Redfin agents weighed in on how these buyers are different. They describe millennial buyers as “cautious,” “tech-savvy” and “well-informed,” and said these buyers are interested in homes with less maintenance and were willing to sacrifice square footage to be closer to work and their friends.
To read the full report, complete with data and charts, please visit: http://www.redfin.com/research/reports/real-time-market-sentiment/2014/2014-q2-redfin-agent-sentiment-survey.html.
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Redfin (www.redfin.com) is a customer-first real estate brokerage that represents people buying and selling homes. Founded and run by technologists, Redfin has a team of experienced, full-service real estate agents who are advocates, not salespeople, earning customer-satisfaction bonuses, not commissions. Redfin.com features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. Redfin also offers online tools that make the entire process of buying or selling a home easier and more fun. The company serves major markets across the U.S. and has closed more than $13 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.
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Rachel Musiker, 206-588-6863