Home-seller confidence got a boost in April this year after home sales and prices picked up in March. Home prices continued an ongoing five-year upward trend, up 7.5 percent from last year to a national median sale price of $273,000. Sales growth grew as well with an increase of 8.9 percent, reports Redfin.
Homeowners show few concerns with selling
In their Home-Seller Sentiment Survey, Redfin surveyed 900 homeowners, 20 percent of which currently have their home listed or plan to sell within the next year. When asked about their top three concerns in regards to selling their home, one in four homeowners said they had no concerns, placing “none” at the very top of the list. Sellers’ confidence has spiked, as having no concerns came in eighth place when Redfin last surveyed home sellers in January of this year. The four top concerns on the list were:
- Rising mortgage rates might discourage buyers
- Prices might fall before I sell
- The appraisal might come in low
High confidence leads to high prices
The confidence sellers showed in April is an example of their shift towards a more aggressive pricing strategy. “Would-be sellers are likely waiting for prices to peak,” says Redfin chief economist Nela Richardson. “They’re trying to time the market to fetch the largest possible gain. Whether the confidence of the current cohort of sellers translates into more new listings in the coming months is the number one question that determines whether 2017 will be a good year or a great year.”
Sellers reporting they price high because they believe negotiation is inevitable received 15.4 percent of votes in January and 21.1 percent of votes in April. Half of sellers in both January and April agreed pricing in a middle range is the best strategy. Because of those 21.1 percent that plan to price high in the future, Redfin concludes it could result in longer days on the market and a potential drop in price down the road.
“Redfin research has shown that homes get half as many views online after a price drop as they do on the day they are listed –meaning it’s critical to make your best first impression to attract your most likely buyers right out of the gate,” says Redfin agent Sylva Khayalian.
With conflicting views on whether to price high or within the middle range, looking at who has the most influence overall, homeowners voted that sellers have a little more power (40.6 percent), all the power (20.0 percent) or share equal power with buyers (24.1 percent). In the first quarter of this year, 22.5 percent believed that buyers had a little more power over sellers; in quarter two, buyer confidence dropped nine points to 13.5 percent. This downward trend shifts when favoring sellers. In quarter two, 40.6 percent believed that sellers had a little more power over buyers, increasing from 35.6 percent in quarter one.
This boost in sellers’ confidence is a potential sign of a contentious market this year, predicts Redfin agent Noah Goldberg, supporting Richardson’s views. Sellers’ luck depend on how buyers respond; however, sellers seem to imagine that the ball is in their court due to March’s success.