Heavy investment activity has helped deplete inventory levels, as well as buyer confidence, but a new Redfin survey suggests that dynamic may be shifting.
It’s been nearly seven years since the housing bubble collapsed; yet, the residual effects on the market are still pronounced enough to dictate the buyer-seller relationship, according to a new survey from Redfin.
Go back a year, when investors had driven up home prices and picked up substantial portions of local inventories, and you’d see that sellers had all but seized complete control of the market, setting prices high only to watch them rise even higher when desperate buyers competed for their dream home. Nela Richardson, chief economist for Redfin, says those days might soon be forgotten.
“Buyers who have been searching for a long time may still try to win deals with aggressive offers,” she says. “However, new buyers in the market are much less willing to chase an escalating sale price to compete with multiple bids.”
The Buyer-Seller Relationship
According to Redfin’s survey, less than one-quarter of national buyers see sellers as “having all the power” in the market. More and more, buyers are re-discovering their power as negotiators, which, as Richardson says, is “ultimately healthier for the housing market.”
However, despite growing buyer confidence, many sellers are still happy to list their home above market value. Richardson explains that often sellers will need six to nine months to adjust to a price change, but points out that the latest shift is taking longer.
“Prices have moved down and then up so much over the past five years that it’s even more difficult for sellers to have a realistic baseline for what their homes are worth in the current market,” she says.
Still, several sellers remain in an actual position of power. With such a lack of quality inventory in some places, buyers occasionally will have to “play ball” in order to secure the listing they want.
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