An increasing amount of real estate data indicates that the real estate sector is heavily in favor of sellers, with home prices on the rise. But despite their increasing, it doesn't appear to be disincentivizing buyers to purchase a property of their own - often paying what the seller is asking for.
According to real estate broker Redfin, based on data collected in mid-May, even though home buyers have expressed some concern about rising home prices potentially pricing them out of the market, they're still willing to pay the listed price. For example, more than four in every 10 respondents said they were amenable to paying even more than what sellers were advertising a residence for in terms of price, mainly because they have a select number of properties to choose from. When a similar poll was conducted in the first quarter of 2013, just 34 percent said they were willing to pay more and only one in four indicated similarly in the final three months of 2012.
Even though consumers appear to be accommodating to this sellers' market, they do have some anxiety about being priced out of the market if this trend continues. About 48 percent of buyers described rising prices as a "major" concern, up from 40 percent last quarter.
Builders optimistic about inventory growing
Recent reports from the National Association of Realtors suggest that home prices should moderate in the not-too-distant future. In addition, builder confidence levels are up, suggesting that construction firms are optimistic they'll be on the job adding to the nation's limited inventory.
In the National Association of Home Builders Housing Market Index for May, confidence levels rose three points to 44 from 41 in April. The higher the number, the more bullish builders are about conditions.
"While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders' views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force," said David Crowe, chief economist at NAHB.
Rick Judson, NAHB chairman, added that the increased sense of urgency among potential buyers is palpable and builders are responding to that fact by feeling more optimistic about the market in general.
Meanwhile, as the sellers' market continues, home inspection experts say that having a pre-listing home inspection done is one of the smartest moves a seller can make.
In an opinion piece by Daniel Schuerman, a Cincinnati-based home inspection expert, he stated that having one performed puts properties on the "fast track" to a successful sale.
"By moving the inspection to the beginning of the sales cycle, [sellers] are able to shorten the process by removing obstacles before they can interfere with a potential sale," said Schuerman.
He added that while pre-listing sales are not a new phenomenon, they aren't done nearly as much as they ought to be considering all of the benefits that result.
More homes selling at heightened pace
Pre-listing inspections may explain why so many homes on the market today are selling at a fast clip. In a separate report released by Redfin, the number of properties that were listed on the for-sale market on April 1 and sold within two weeks increased by nearly 40 percent versus the same period in 2012. Some of the fastest-selling markets were predominantly in California, specifically San Jose, San Francisco, Ventura and Sacramento.
Occasionally, home purchases were completed inside of 24 hours. In San Francisco, for instance, about 81 homes that went up for sale on the first of April sold less than a day later, Redfin notes.