Responses to Redfin’s Real-Time Seller Survey present a classic good news / bad news scenario. The good news is that homeowner confidence continues to rise—22 percent of sellers believe now is a good time to sell, up from just 15 percent three months ago—indicating a potential easing of tight inventory in the coming months. The bad news is that many would-be sellers continue to opt for renting out their home rather than selling, so any increases in listings are likely to be modest. Even when (or if) more inventory comes, it’s likely to hit later this year than most years, as many sellers have shifted their timelines a few months into the future.
After watching the housing market become increasingly seller-friendly throughout 2012, the year closed with sellers indicating an increasingly positive outlook. Here’s what sellers told us this quarter:
- 34.1 percent indicated that missing out on future price gains was a major concern about selling now—up from 30.6 percent last quarter and overtaking general economic conditions (33.8 percent, down from 39.7 percent in the fourth quarter) as the top concern;
- 49 percent of respondents indicated that they were planning to sell, up from 45 percent in the fourth quarter;
- 21 percent of those not planning to sell are renting out their home, while 47 percent of those who are planning to sell would also consider renting out their home instead of selling, up from 43 percent in the fourth quarter;
- 22 percent believe it is a good time to sell, up from 15 percent last quarter, while 54 percent believe it is a good time to buy, down from 58 percent last quarter; and
- 81 percent of sellers believe that home prices will rise in their area in the next 12 months, up from 75 percent in the fourth quarter.
Last quarter we began to see slight changes that indicated seller confidence was slowly increasing. While we had hoped that this would lead to increased inventory in 2013, that has not happened… yet. Thankfully, all of the signals that began turning positive in the fourth quarter moved even more strongly in that direction this quarter. As sellers continue to gain more certainty in the market, the prospects for improved inventory will only get better.
About the Survey
This quarter’s seller survey took place over five days beginning last Thursday (January 17 to 21, 2013), We surveyed 1,847 people who had used Redfin in the last three months and who indicated that they were a homeowner. 895 of the respondents indicated an intention to sell his or her home at some point in the foreseeable future, while 930 respondents were not planning to sell. The results span 20 metropolitan markets in the U.S.: Atlanta, Austin, Baltimore, Boston, Chicago, Dallas, Denver, Las Vegas, Los Angeles, New York, Orange County, Philadelphia, Phoenix, Portland, Riverside / San Bernardino, Sacramento, San Diego, San Francisco, Seattle, and Washington DC.
Data and charts are below. If you’d like to review more detailed data, please contact press (at) redfin (dot) com. If there are questions you’d like us to include in the survey next time, please leave a comment below.
The First Quarter 2013 Redfin Real-Time Home-Seller Tracker
Many Potential Sellers Are Now Landlords
For the first time this quarter, we asked homeowners who were not planning to sell to share why. The most popular choice by far was simply that they are currently happy in their home and simply have no desire to sell. However, among those who would like to sell, half are opting to rent out their home instead, while about a third still need to wait for higher prices.
Home-Selling Time Frame
Surprisingly, despite the fact that the new year typically kicks off the “selling season” for real estate, the percentage of respondents who indicated that they were selling “right now” was sliced nearly in half from the fourth quarter—falling from 31% to 16% this quarter. Most of that loss was made up in the share of homeowners who intend to sell in the next six months, implying that this year’s selling season will get a late start.
More Sellers Feel it’s a Good Time to Sell, Fewer are Optimistic about Buying
The 32 percentage point gap between how many homeowners believe it is a good time to sell (22 percent) and those that believe now is a good time to buy (54 percent) fell considerably from the 43-point gap in the fourth quarter. As this number continues to improve, more sellers will likely begin to put their homes on the market in 2013.
The share of respondents who believe now is a bad time to sell fell again as well, dropping to fewer than one in five.
Four out of Five of Sellers Believe Prices Will Rise
The percentage of sellers who believe prices will rise either “a lot” or “a little” in the next twelve months shot up even further in the first quarter. 81.2 percent of respondents believe that prices will rise in their neighborhood, up from 74.6 percent in the fourth quarter.
And Yet, More Sellers Consider Renting
Despite the various signals showing an increasing confidence among sellers, the percentage of likely sellers who indicated that they are considering renting out their home instead of selling increased slightly, rising from 43 percent in the fourth quarter to 47 percent in the first quarter.
Sellers Still Wary of FHA, But Less Focused on Cash
As the market continues to gain strength, many sellers are realizing that if one deal falls apart, they’ll be able to find another buyer easily enough. Thirty-two percent would take an all-cash offer over a higher offer backed by conventional financing, down from 37 percent last quarter. Buyers with FHA loans continue to be avoided by sellers, with only 27 percent indicating they would take an offer for more money if it were financed with an FHA loan.
Rising Prices Surges as a Reason for Selling
While “life event” continues to be the top reason for selling, “rising prices” shot up from just 13 percent of respondents in the fourth quarter to 21 percent in the first quarter—the largest change among any of the options.
Fewer Concerns about the Economy
“I’m worried about general economic conditions” lost its place as the most common answer when we asked sellers about their major concerns with selling in today’s market, falling from 39.7 percent in the fourth quarter to 33.8 percent in the first quarter. Taking its place at the top was “homes prices will rise in my area after I sell,” with 34.1 percent. Nineteen percent of respondents had no major concerns, up from 16 percent in the previous quarter.
Almost every sign in this month’s survey points toward more sellers being willing and interested in putting their homes on the market. While that sentiment has not yet translated into an increased number of new listings, there is still hope that the tide will turn over the next few months, easing the frustrations of buyers caused by last year’s tight inventory.