I found an interesting article that I wanted to share with you. It was originally posted on October 27th by Amy Musser at http://www.redfin.com/research/reports. Interestingly, real estate activity in Monmouth County has picked up in October, both for buyers and for sellers. If you’re looking for a home, you might be pleasantly surprized by the number of homes that have been recently listed.
Fewer Sellers Think Now is A Good Time to Sell Than Did Last Quarter
Over the past few months, sellers have gotten the message that the market is no longer skewed in their favor. In the latest Redfin Real-Time Seller Survey, the belief that now is a good time to sell dropped by 17 percentage points from last quarter. Sellers last quarter told us they planned to price their homes aggressively, but it turned out that most buyers were unwilling to pay above market price. And Redfin agents across the nation started reporting surges in price drops in the first portion of the third quarter.
“In July and August, sellers were testing the market by pricing their homes above market value,” said Denver Redfin agent Paul Stone. “They were hopeful, but many got the message too late that the market had already shifted. They had to adjust their expectations and their home prices. As of September, it seems that sellers have gotten the memo and are pricing closer to market value.”
While the number of homes for sale that had a price drop fell in September compared with August, 16.5 percent of homes sold above list price in September, compared with 18.1 percent in August and 23 percent last year.
“Right now the real estate climate is very different from this time last year,” said Boston Redfin agent Shawn Flynn. “There are more homes for sale but fewer homes are selling, whereas last year the opposite was true. I’m starting to have conversations with sellers for the first time in two to three years about how it’s no longer a seller’s market. While some sellers are disappointed that they can no longer expect double-digit price gains, increasing inventory and stabilizing prices provide relief for everyone — buyers and sellers — that we are moving toward a much more balanced market.”
The Waiting Game: Some Sellers Hold Out For Higher Prices and More Inventory
Many sellers are still hopeful that they can get more money for their home and are deciding to wait to sell. Fifty-nine percent of sellers said they want to hold out for the maximum price on their home.
“Sellers hoping for higher prices will face reality soon, as all signs point to lower price growth and less competition among buyers in coming months,” said Redfin Chief Economist Nela Richardson. “Buyer demand is there, but only at the right price.”
Oddly enough, low inventory actually dissuades potential sellers from listing, first because there’s nothing for them to buy, and second because of the perception that the market just isn’t doing anything. Sellers are waiting to list their homes because there are too few homes available (36.3 percent) or there are too few affordable homes (16.3 percent). The lack of homes for sale creates a vortex of short supply that can only be relieved when potential sellers find homes they want to buy and then list their own homes. However, we are seeing inventory loosening up slowly. In September, the number of homes for sale was up 4.1 percent from August and up 6.3 percent from September 2013 in markets served by Redfin.
Another way to measure housing supply is by looking at the number of months it would take to sell all current housing stock at the current rate of sales. Traditionally, supply of less than six months is considered a seller’s market, and more than six months is a buyer’s market. During the third quarter, months of supply increased to 4.7 from four, and sellers seem to have perceived this shift.
“We are definitely starting to feel the inventory crunch lessen here in Northern Virginia,” said Redfin agent Stacy Holscher. “In the past few weeks I’ve had several sellers who have decided to list their homes because they finally started to see more homes hit the market that they felt were reasonably priced. These lower home prices actually spurred them to list their home.”
Here’s what else we learned from sellers this quarter:
1. Sellers Want an End-to-End Experience when Listing Their Homes
Surprisingly, making top dollar is not the primary concern among sellers when listing their home. When asked what values they look for most when choosing a listing agent, 27.5 percent of sellers indicated that they look for an agent with a “willingness to take care of everything so the seller doesn’t have to.”
2. Sellers Tend to Opt for “Tried and True”
Previous experience with an agent is the most common selling point for sellers looking for a listing agent, and even trumps choosing an agent based on their qualifications.
3. Many Sellers Only Evaluate One Agent, But Most Sellers Still Have Concerns
Many sellers indicated that they are likely to choose an agent who is the most qualified, but most sellers (37.4 percent) said they only evaluate one agent before deciding to list. Thirty percent of sellers indicated that they’d evaluate two agents, 19.8 percent would evaluate three and only 12.8 percent would evaluate four agents or more.
When asked what their biggest concern is when working with an agent, 32.5 percent of sellers responded that they are worried that the agent will not do enough to market their home.
About the Survey
This survey was conducted between October 1 and 3, and respondents included 295 current and potential sellers. Respondents spanned 30 markets in the U.S., including West: Denver, Los Angeles, Las Vegas, Orange County, CA, Phoenix, Portland,Riverside-San Bernardino, CA, Sacramento, San Diego, San Jose, San Francisco,Seattle, Ventura County, CA; South: Atlanta, Austin, Baltimore,Dallas – Fort Worth,Fort Lauderdale,Houston,Raleigh, San Antonio,Washington, D.C., West Palm Beach, FL; Midwest: Chicago,Northeast: Boston, New York City (Bronx and Queens),Philadelphia, Rhode Island, Upstate New York.