|Spring Homebuying Season Begins.|
|A new homebuyer/agent sentiment survey by “NRT LLC, the parent company of Coldwell Banker Residential Brokerage, has found a growing sense of optimism among buyers as the nation’s housing market continues to improve. In particular, buyers are becoming more confident about the stabilizing and increasing value of home prices.
The annual homebuyer survey, which drew 5,865 responses, was designed to discover what was behind the recent increases in buyer demand. The key finding here seems to be a growing optimism about improving prices, which appears to be driven by an extreme shortage of homes for sale in many markets.
While low interest rates and change in life situation were cited as the two highest factors motivating buyers, expectation that home prices will rise – a very new sentiment among buyers – came in a very close third. This optimism over values grew the most over the last 12 months (61 percent) closely followed by “increased optimism around selling” (51 percent).
Dan Barnett, NRT’s senior vice president of marketing, said there is a very clear correlation between a growing optimism over prices and buyer frustration over the lack of homes for sale. The graph below depicts results by various NRT local operating companies:
|Despite increased buyer and seller optimism overall, there still does not seem to be a big increase in move up buyers. About 42 percent of agents said move-up buying was increasing “modestly” and only 7 percent said it was increasing significantly.
Below are the results of the survey:
What is motivating buyers to look now (factor is “very motivating” or “motivating”):
83% Low interest rates 60% Change in life situation 57% Expectation that home prices will rise 51% Job relocation 46% Real estate investment value 43% Confidece in personal economic outlook 42% Increased optimism around selling 37% Rising rental prices
Which factors have become more important now than a year ago:
61% Expectation that home prices will rise 51% Increased optimism around selling 44% Low interest rates
What are buyers complaining about: (% saying “frequently” or both frequently and “more often than not”) 41% (69%) Lack of inventory 19% (52%) Uncertainty in economy 11% (44%) Home affordability 19% (43%) Difficulty with mortgage appraisal 18% (42%) Difficulty qualifying for a mortgage
How do buyers cope with limited inventory (agent could pick more than one): 87% considered expanding the geography they would consider 85% prepared to pay more 74% considered distressed properties 70% stopped looking 54% considered buying new construction 54% considered foregoing a move
What is happening in the overall market:
Prices: 63% of our agents found that home prices were increasing, with larger increases identified on the west coast. Half of the San Francisco agents described home prices as increasing significantly.
Inventory: 78% of our agents found inventory to be decreasing. Atlanta, Florida, Hawaii and Sacramento are feeling the most constrained by low inventory.
Transaction volume: Agents report that transactions are up somewhat – 40% – with the most activity being reported in the Midwest and West.
Buyer confidence: 60% of agents report that buyer confidence is increasing, across the board. Sacramento and Harrisburg, while generally positive, lag the nation.
So what does all this mean for you? Every day, both buyers and sellers are growing more confident as the housing market continues its steady rebound. If you have been thinking about buying a home, you shouldn’t wait too long. We have a good window of opportunity right now when interest rates are low and prices are still very affordable. But that won’t last forever, as history has shown us. Even a small jump in mortgage rates could significantly change how much you’ll end up spending on a home. If you’ve been considering buying a home, there may not be a better time than now. I’m ready to help you find the home of your dreams today. Let’s get started!