Home sellers, though increasingly confident with the real estate market, are continuing to hang tight and wait for further improvements to the real estate market before listing their properties, according to the latest Real-Time Seller Survey from Redfin.
Twenty-two percent of home sellers, Redfin found in the Real-Time Seller Survey, are confident with where the housing market is headed, up from just 15 percent three months ago; however, home sellers remain tepid about entering the housing market, and Redfin expects housing inventory to increase only modestly in the coming months.
Real-Time Seller Survey – Tepid Sellers Holding Back
The housing market, Redfin noted, has been growing more and more into a seller’s market, what with rising prices and falling housing inventory; but still, as the Real-Time Seller Survey demonstrated, those market conditions have not yet translated to more initiative from home sellers:
- Just over 34 percent of home sellers indicated in the Real-Time Seller Survey that missing out on future price gains was a major concern of theirs, up from 30.6 percent in the fourth quarter of 2012.
- However, 49 percent of sellers did say they were planning to sell, up from 45 percent in the fourth quarter.
- Home sellers’ relationship to the rental market was perhaps the most intriguing aspect of the Real-Time Seller Survey. Twenty-one percent of home sellers who are not planning to sell are currently renting out their home, and even of those planning to sell, 47 percent said they would consider renting instead of selling, which is up from 43 percent in the fourth quarter.
- Finally, 81 percent of sellers believe that home prices will rise in their area in the next 12 months, a six percentage point increase from the fourth quarter.
Where Have the Sellers Gone?
Redfin’s conclusions from the Real-Time Seller Survey were logical ones – in the end, market conditions will simply have to improve further to entice more home sellers to list their homes. And there are signs that such developments are right around the corner, as Redfin’s Tim Ellis wrote.
“Thankfully, all of the signals that began turning positive in the fourth quarter moved even more strongly in that direction this quarter,” Ellis wrote in the Real-Time Home Seller Survey. “As sellers continue to gain more certainty in the market, the prospects for improved inventory will only get better.”
Michael Parent, the managing broker of Coldwell Banker Residential Brokerage in St. Charles and the 2013 president-elect of MORe, said that though inventory remains low, the situation is actually quite strong for home sellers in his markets.
“We’re seeing the properties that come out now sell, and often with multiple offers,” he said.
So in order to see listings increase, Parent said agents need to get the word out and inform more potential home sellers of how strong the housing market is. With rents increasing and mortgage rates at record lows, the time is right to sell, and though he does expect inventory to increase in the later weeks of the first quarter, he said it’s ultimately up to agents to spread the gospel about the housing recovery.