Homebuyer Enthusiasm Slips; Growing Sense that the Market Is Shifting Toward Sellers
So is it a bad thing or a good thing that the buyers are sensing that the market is shifting towards the sellers? I think that with the low interest rates the buyers are still going to get great deals and maybe get off the fence sooner than wait around thinking if the prices are going to drop lower. If the prices start increasing at a 2-3% increase per year it will still take a long time for the cost of the properties to rise to 2006 levels. I hope the media gets on the band wagon. From my experience they are always late to the party. Inventory is at seven year lows and the demand from buyers is double what it was last year.
I think the survey isnt very accurate for the fact is the buyers are not as tuned into the market as the real estate brokers. The buyers will understand the importance of acting quickly is this phase of the market or they will lose a few houses and their enthusiasm will get knocked down a few pegs. <iml>
After a hectic spring run-up in prices and a tense summer of bidding wars, buyers are feeling less confident about the market. This year’s refrains of scarce inventory and bidding wars are curbing the buyer enthusiasm we saw in our last survey. With the latest Redfin Real-Time Home-Buyer Tracker, updated with data for the third quarter of 2012, we’ll try to understand the changing motivations and expectations of today’s buyer.
Now that we have data from three quarterly surveys, we see some clear trends emerging.
Home buyers surveyed
- Believe that the market may be shifting against them: 46% of respondents believe now is a good time to buy, down two quarters in a row; in the first quarter it was 56%. Thirty-two percent believe now is a good time to sell, up two quarters in a row; in the first quarter it was 13%.
- Are more confident that home prices are on the rise: 61% believe prices will increase, up two quarters in a row; in the first quarter it was 32%.
- Increasingly prefer a conventional sale over a foreclosure or short sale: 62% of respondents were “very interested” in conventional sales, up from 57% in the second quarter and 48% in the first quarter, marking a return to normalcy after years of bargain-hunting;
- Are more likely to back off when faced with multiple offers: 31% said they would step back from a bidding war, compared to 28% in the second quarter, the first time we asked this question. Just 8% would do whatever it takes, compared to 10% a quarter earlier.
- Have growing concerns about the economy, despite rising home prices: 27% of respondents cited general economic weakness as a concern about buying this year, up from 24% in the second quarter and 20% in the first quarter.
Many buyers who emerged from hibernation this spring eager to take advantage of low rates and near-bottom prices now seem to have become demoralized by the intense competition for a limited selection of homes for sale; 71% of respondents reported encountering competition on at least one offer.
Despite these frustrations, buyers working with Redfin agents are willing to power through until they can find a home—at least as long as rates stay low. Referencing today’s ridiculously low rates, Redfin San Francisco Agent Landon Nash notes that he is working with “multiple buyers who continually mention ‘free money’ and are willing to pay up for the right property.” The sentiment that buyers are frustrated but still in the game is echoed by agents across the country.