Real Estate Outlook: Buyers vs Sellers
We all read the same newspapers and listen to the same analysis, right? While no one has a crystal ball, buyers and sellers have very different opinions about whether their real estate glass is half full or half empty.
The Question Posed
When asked, “Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?”, their answers are significantly different.
The Home Sellers’ Point of View
More than 40% of home sellers predicted a down market lies ahead, with the next highest percentage believing the market will stay flat. The least common answer from sellers was up, and essentially none expressed uncertainty. Home sellers are skeptical of home values improving, and not afraid to say so.
The Buyers’ Counterpoint
As for buyers, the vast majority expressed uncertainty for the future of real estate prices. The ones who took a position opted in nearly equal numbers for a move upward and a flat market, with virtually no one predicting a downward trend.
What Does it Mean?
The obvious conclusion is that home buyers are much more hopeful than sellers dare to be at the moment. With interest rates at historic lows and affordability at record high rates, home buyers are testing the waters and bumping up against the competition of multiple offers in many markets and many price points.
There is no question that competitive pricing is essential for homes to sell, but they are selling. Power in negotiating comes in part from confidence in your position. Is it possible that home buyers hold more power than they realize?
Affordability in California reached its peak near the dawn of 2009, and remains high, with more than 50% of California households able to buy at today’s prices. Affordability nationwide hovers at less than 70%. There are attractive opportunities for home buyers to re-enter the marketplace and enjoy the benefits of home ownership today.
*Source: California Association of Realtors