The strong March housing market was followed by a significant boost in home-seller confidence this April.
In its latest Home-Seller Sentiment Survey, Redfin surveyed nearly 900 homeowners, about 20 percent of whom either said their home was currently listed for sale or expressed plans to sell within the next year, and are therefore considered “home sellers” for the purpose of this report.
Among those 179 home sellers, one in four said they had no concerns when asked what their top three concerns were regarding selling their home, ironically causing “no concerns” to rank in the top spot on the list.
This is a nine-point jump in confidence from when we last surveyed home sellers three months ago. In January, 16 percent of sellers selected the option “none,” and this response ranked in the eighth spot on the list of concerns.
There was also a decline in the percentage of sellers expressing concerns about finding a replacement home, dropping from the third spot in January when 24.1 percent of sellers expressed this concern to fifth place in April when 18 percent had this response.
“Despite strong sentiment among current home sellers, the numbers show prospective sellers have been very slow to list their homes. New listings dropped 2.3 percent in the first three months of the year compared to the same period last year,” said Redfin chief economist Nela Richardson. “Would-be sellers are likely waiting for prices to peak; 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.”
The fact that home sellers were emboldened in April is also reflected in a slight shift toward a more aggressive pricing strategy. The share of sellers reporting they would price high because they believe negotiation in inevitable increased almost six percentage points from 15.4 percent in January to 21.1 percent in April.
In both the January and April surveys, about half of the sellers we surveyed agreed pricing in a mid range according to comparable properties is the best strategy. However, those who are feeling particularly plucky and deciding to price high should be forewarned. This approach to pricing is often cited as being foolhardy by seasoned Redfin agents since it can cause a home to sit on the market longer and may lead to an eventual price drop.
“Over-pricing one’s home is a common mistake made in a seller’s market,” said Redfin Los Angeles real estate agent Sylva Khayalian. “Especially as we progress through the spring and into the summer months, homeowners see neighbors receive multiple offers and sell for more than their asking price and some assume they can ask for even more. Redfin research has shown that homes get half as many views online after a price drop as they do than 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.”
When sellers were asked how they would describe the current balance of power in the market, 20 percent said they have all the power. That is up nearly seven percentage points from three months earlier when 13.1 percent expressed this level of certainty.
The percentage of sellers surveyed this spring reporting that buyers have a little more power than sellers dropped nine points from 22.5 percent in January to 13.5 percent this April.
“The difference between seller confidence in the winter versus how undaunted they appear to be this spring serves as a teaching moment for homebuyers,” said Redfin Hoboken, New Jersey real estate agent Noah Goldberg. “Buyers tend to face less competition and have more success at getting the price they want during the winter, as Redfin research has shown. It’s clear from this survey, at least in terms of the 2017 market, buyers will also face more confident sellers this spring than they did in January — a potential sign of a contentious market this year.”