Although low mortgage rates fueled plenty of demand throughout the past year and a half, the majority of prospective sellers are eager to enter the housing market within the next six months, according to a new Realtor.com survey. Overall, sellers’ expectations for bidding-wars and fast-paced sales have grown higher since the spring, but the potential uptick in new listings could reprieve the market's shortage of available homes for sale.
“The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter," said George Ratiu, manager of economic research for Realtor.com. “Buyers should be ready for high asking prices and offer deadlines as seller expectations of the upcoming market are greater than in the spring, but an increase in new sellers could mean some relief from the inventory crunch.”
Among homeowners who plan on entering the market within the next year, 65% expect to within the next six months, including 19% who have already listed their homes. More of today’s prospective sellers (93%) have already taken steps toward listing their home compared to last spring (76%), including working with an agent (28%). Also, more than one-third of prospective sellers, at 36% each, have researched the value of their home and others in the neighborhood, as well as started making repairs and decluttering.
Consumers' top reasons for selling reflect the rising influence of more time spent at home during the pandemic. Nearly two times as many prospective sellers (33%) have realized they wanted different home features after spending more time at a home compared to last spring (15%). Due to more sellers having children at home this winter (65%) than in the spring (43%), family considerations are a top reason among homeowner decisions to enter the market; 37% of prospective sellers says their current home doesn’t meet their family needs and 32% want to move closer to family and friends.
The rise in remote work is also a key driver this winter with 23% of sellers looking for a home office and 19% no longer required to live near their workplace, up 6% from March.
Additionally, sellers have greater expectations for the current market this winter with nearly half of prospective sellers believing they can make a profit (45%), nearly doubling from last spring (24%). When asked how the current market will impact their terms, top responses include asking over whatever their house is currently worth (42%) and asking for a quick close (29%).
“In addition, as more homes have entered the for-sale market,” Ratiu continued, “price growth has moderated from the spring's double-digit levels to a more approachable 8% to 9% range. Seasonality will play a key role in seller activity levels as we approach the typically-slower holiday period, with new listings already slipping in recent weeks. As buyers race against the clock of rising mortgage rates, sellers who price their homes in line with today's market and stick to their plans will likely see their expectations met.”
Compared to the spring, more of today’s prospective buyers anticipate that buyers will compete in bidding wars, offer above asking price, and forgo contingencies like inspections and appraisals. See the table below for more detail.
However, prospective sellers plan to list in relatively affordable price ranges and are open to compromise if their expectations are not met. Homes in the price range between $351,000 and $750,000 remain at the core of the market, which is the same as March (29%). Yet, more sellers plan to list in the $500,001 to $750,000 price range, which aligns with recent median prices in increasingly popular first-time buyer cities like Riverside, California, ($540,000), Austin ($546,000) and Denver ($600,000).
Approximately, 77% of prospective buyers would be willing to accept a lower offer on their house to close quickly, compared to 54% in March.
After these people sell their homes, a higher percentage are willing to move in with family (19%) or temporarily rent their home back from the buyer (29%). Meanwhile, the percentage of prospective sellers that are planning to move into their new home immediately after selling dropped significantly from last spring from 62% to 31%.
"The right time to sell your home is a deeply personal decision that has to be right for you and your family. For homeowners who do feel ready to sell, getting pricing right from the start is key to a fast and successful home sale in any market – take the goldilocks approach," said Lexie Holbert, home and living expert at Realtor.com. “If you're looking for resources and tools to help with everything from setting a price to finding your family's next home at the same time, Realtor.com users can explore options like initial cash offers from Opendoor in its Seller's Marketplace.”
