October 29, 2014

Homeowners’ Optimism On Home Selling Drops In Third Quarter

Real estate agent with house model and keys

Based on the most recent Real-Time Seller Survey from Redfin, the number of homeowners who have a positive perception about selling their homes have reduced in the third quarter of this year, which now shifts the rising confidence on the housing market.

The survey, conducted earlier this month, involved hundreds of home sellers and out of these number, only 35.1% agreed that this was a good time to sell their home in their neighborhood.

Such result shows a drop of more than 17 percentage points from the survey conducted in the second quarter where half of the sellers were optimistic about the current state of the housing market. During that time, 40% of those home sellers claimed that they priced their house aggressively as they plan to take advantage of the high demand and low inventory, which wasn’t an effective strategy for others.

“In July and August, sellers were testing the market by pricing their homes above market value,” Denver-based Redfin agent Paul Stone said. “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.”

Throughout September, reports from Redfin show that 16.5% of the homes were sold more than the list price as compared to the 18.1% sold in August and 23% from a year ago.

Although other sellers set their limits based on the current status of the housing market, majority are still wishing to get more from the selling price. 59.3% of Redfin’s respondents said they were willing to wait to get the maximum price as appreciation continues to increase.

“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,” Redfin Chief Economist Nela Richardson said. “Buyer demand is there, but only at the right price.”

Another reason cited by other home sellers why they will wait is supply concerns with 36.3% claiming that there isn’t ample inventory for them to find a new home while 16.3% claim that there isn’t enough affordable homes to purchase.

“Right now the real estate climate is very different from this time last year,” Boston-based Redfin agent Shawn Flynn said. “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.”

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