Homebuyers Willing to Pay More in Tight Market
Homebuyers get it. After many months of reports and news stories about shrinking inventory and rising home prices, a new survey says buyers are increasingly willing to pay more for residential properties.
Low inventory caused 41 percent of buyers to consider paying more for a home in the second quarter of 2013, according to the Redfin survey. That’s up from 34 percent in the first quarter and 26 percent in the fourth quarter of 2012.
The survey also found that just 31 percent of buyers believe now is a good time to buy in their neighborhood, down from 40 percent last quarter and 48 percent a year earlier. Meanwhile, 67 percent say now is a good time to sell, up from 48 percent last quarter and 28 percent a year ago.
Homebuyers (79 percent) expect prices to continue rising over the next 12 months, with 23 percent saying they will rise “a lot.”
Redfin conducted the survey among buyers in 22 real estate markets, including San Francisco, and it appears to mirror conditions here.
However, real estate dynamics in the Bay Area have generally foreshadowed developments elsewhere in the nation, and here at Pacific Union we’re already seeing signs than inventory levels are rising, offering a measure of relief to homebuyers. Home prices continue to rise, however, keeping the local housing market fluid.
For more than a year, low interest rates have remained the No. 1 reason for buying a home, according to the Redfin survey. But the percentage of buyers who identify that as their main incentive has slipped steadily, from 73 percent in the first quarter of 2012 to 56 percent in the second quarter of 2013.
Meanwhile, the percentage of buyers who cite rising prices as their main reason jumped to 41 percent in the second quarter of 2013, from 31 percent a year earlier and just 19 percent in the first quarter of 2012.
When asked about their top concerns about buying a home, the most common response was “not enough good homes for sale,” at 65 percent, followed by “rising prices,” at 48 percent — a figure more than double the 21 percent response rate a year ago.
(Photo by Andrew Michaels, via Flickr.)