Real estate agents, who deal directly with buyers and sellers, are in a position to know firsthand what’s on the minds of both groups when it comes to home sales.
A new report from real estate brokerage Redfin found buyers in the fourth quarter continued to be frustrated by the slim pickings among inventory, were willing to pay more than a seller’s asking price and were willing to settle for less when it came to home features.
Redfin’s national survey of 468 agents provides insight into a housing market that continues to experience tightening inventories, rising home prices and mortgage rates that trend upward.
A majority of agents continued to think it’s a good time to buy a home, 56 percent versus 55 percent in the third quarter, even if 63 percent believe sellers have “unrealistic expectations” about the value of their properties.
Among other findings:
Eighty-seven percent of agents said limited inventory was buyers’ biggest challenge.
Fewer agents think now is a good time to sell a home - 65 percent in the fourth quarter compared with 72 percent in the third quarter and 86 percent in the second quarter - even if the majority still think the time is right.
About 30 percent said buyers were “flexible on features” and were “prepared to waive contingencies” to win a bid.
Ennis Antoine, associate broker at Better Homes and Garden Real Estate Metro Brokers in Atlanta, said some buyers are settling for less because they may face a time crunch in finding a place to live. Others aren’t compromising on location, but may settle for a home that is smaller or a little dated.
Antoine said he’s advising clients to be patient. “You have to understand there’s not a lot of inventory, and when you find the home you want, you have to give your best offer initially because there’s no haggling. You can’t bargain down.”
The Redfin survey also found agents were concerned that rising interest rates would limit home sales, with 39 percent believing that if rates exceeded 5.5 percent, sales and price growth would suffer. Other agents put the threshold at 6 percent.
Federal Reserve policymakers plan to scale back efforts to stimulate the economy by keeping interest rates low, which means already-rising mortgage rates will continue to trend upward.
The average 30-year fixed rate mortgage rose this week to 4.69 percent from 4.63 percent the previous week, according to weekly data from Bankrate.
Redfin surveyed agents in 22 metropolitan areas.
Business, Pages 28 on 01/04/2014