Real estate headlines for the past year have been dominated by the tight inventories and skyrocketing prices of an intense sellers market. In part one of our Sellers Sentiment Survey series, we uncovered the motivations, decisions and experiences of homeowners who sold in the last six months. But, what can we expect from 2021 sellers in the next six months? Here’s what our survey uncovered:
Harsh Market NOT the Predominant Factor in 2021 Seller Delays
When we asked respondents who plan to sell within the next six months why they haven’t put their homes on the market sooner, we expected the harsh market conditions to dominate their answers. After all, homeowners typically sell their homes with the intention of buying a new one, and inventory has been anything but available this year.
Instead, our survey found that almost 60% of owners have waited to list their homes because timing hasn’t felt right. In a near tie, 21.8% of respondents said their home simply isn’t ready to be on the market, while 21.7% said they’re waiting for a better time to uproot their family. Another 9.5% have been waiting for the pandemic to subside, and 5.9% want to speak to an agent or financial advisor before they list.
The remaining 40% of respondents indicated market-related motivations for delaying their listings. Concerns regarding low inventories have kept 20% of these would-be sellers on the sidelines, while 8.6% held off on listing due to uncertainty that their home will sell for what it’s worth. With low interest rates dominating the market over the last couple of years, 7.5% of respondents felt there hasn’t been a need to rush to sell, believing there’d be plenty of time to sell and purchase a new home. Finally, 5% cited low demand in their local market as reason to wait.
More Affordable Homes Could Become Available
In part one of our survey series, we shared that 82% of homeowners who sold in the last six months accepted offers at listing price (33%) or above (49%), nearly half of them sold in less than a month, and a quarter of them had five or fewer showings before finding a buyer — reflecting both the low supply of available homes and the rush to buy when new listings hit the market.
According to the National Association of Realtors, median existing-home prices reached an all-time high in May, up 23.6% year over year to $350,300.
Looking at 2021 sellers who’ve held off on listing thus far, our survey found that over half of them plan to list homes valued at $300,000 or less. Local market conditions and other factors will ultimately influence the price of these listings, but this finding could indicate that inventory traditionally sought by first-time buyers could relax enough for eager buyers without deep pockets, or for current owners looking to downsize.
Potential Listings in Each Category
If you’ve been thinking about buying your dream home in the near future, you just might be in luck — over 47% of our 2021 sellers indicated their future listing will be a single-family detached home. Almost 29.5% plan to list an attached home like a condo or townhouse, and for all you potential real estate investors out there, keep your eyes peeled — 13% plan to list a multi-family property like a duplex or quadplex. Rounding out the list of future potential listings are luxury homes like mansions at 6.2%, and vacation homes such as beach houses and lakeside cabins at 4.1%
Sellers Showing Some Flexibility
We know the market has been particularly harsh for buyers; our look at recent 2021 sellers found that 41% used at least one strict selling parameter, including refusal to consider offers with contingencies or other “strings attached.” Twenty-eight percent of them required all-cash payments, no contingencies and/or less than 30 days to close, while 14% opted for selling their homes completely “as is,” leaving buyers without the flexibility available in less competitive markets.
Can buyers expect more of the same from sellers moving forward?
As it turns out, the pressure on buyers may lessen in the coming months, as only 33% of future sellers surveyed plan to use similar strict selling parameters. Surprisingly, almost as many (32.2%) also said they plan to make repairs to their home prior to listing (compared to just 5% of recent sellers who indicated they made pre-listing repairs).
While most agents don’t recommend waiving inspection contingencies, this finding suggests that desperate buyers may have more choices of “move-in-ready” homes in the near future.
If we’ve learned anything from the past year’s real estate market, it’s that buyers need to be ready for anything. But if our survey respondents are any indication, buyers in the near future could see at least some relief in the homebuying process. Only time will tell what that might look like.