Agents Predict More Inventory Is on the Way

While 98% of agents in a recent HomeLight survey agree it is a sellers market, is there a light at the end of the tunnel for frustrated buyers?

Only 37% of agents reported an increase in bidding wars in their areas, compared to 52% the previous quarter. Additionally, more than half of agents reported that they know of buyers who backed out of an agreement due to regret over the previously agreed upon purchase price. Many buyers are in a hurry to take advantage of low mortgage rates, while also trying to find a home, which could lead to remorse.

But more inventory may be on the way, thanks to the COVID-19 vaccine. Nearly one-third of agents reported that the vaccine is impacting the market, most specifically, that sellers’ health concerns about the prevalence of the virus and having people in and out of their homes is dropping. Nearly half of agents surveyed said they have seen sellers take advantage of the market even though they hadn’t planned to list and 48% said they anticipate more homes to hit the market over the summer and through the fall. Specifically, 61% said they think almost-retirees will move or downsize a little earlier than planned to earn more on the sale of their home and 59% said empty nesters will list earlier than expected and use the money to relocate. And with more companies going fully remote, 43% expect remote workers to list their homes and move somewhere less expensive.

However, new home construction is still lagging and still costly. The report found that 56% of agents said builders are increasing prices on in-contract buyers because of the rising cost of supplies. Nearly 45% of agents said builders are delaying pricing homes because of the unpredictability of the cost of housing supplies. And 31% of agents said buyers are hesitant about new construction prices.

However, agents are remaining positive. Eighty percent said they feel optimistic about this year’s housing market, down 4% from last quarter, but up 12% year to year.