Report: Buyers’ top concern is price
A new report from Redfin also shows “repeat homebuyers’’ are more likely to sell before buying again.
More first-time homebuyers were concerned by high home prices in the second quarter of 2015, according to a new survey by Redfin.
Real estate firm Redfin surveyed 3,500 homebuyers nationwide and found 27 percent said high home prices were their top concern in 2015. Home prices replaced low housing inventory, which buyers reported as their top concern last year.
“Buyers can’t keep up with high price growth,’’ said Redfin chief economist Nela Richardson. “Even if price growth slows down what lays in its wake is still high prices.’’
After affordability, buyers surveyed by Redfin listed competition from other buyers, lack of inventory, and selling their current home as their top concerns. Only 10 percent reported having “no major concerns.’’
In 2014, Redfin listed rising mortgage rates and fatigue among the top five concerns for buyers. According to this more recent survey, those factors have been edged out of the top five by the need to sell a current home and having a significant down payment.
Meanwhile, Redfin’s report indicates “repeat buyers’’ – homeowners who have a home to sell and are looking to buy another property – are shifting their tactics. The report found 44 percent of repeat buyers plan to sell their home before buying a new one, a jump from 23 percent the previous year.
Only 21 percent of repeat buyers said they planned to buy a new home, then sell their existing one. That’s down from 29 percent in the last quarter.
Richardson says it makes sense for current homeowners to complete the sale of their original property before entering such a fierce market for homebuyers.
“Last year we saw people buying first because they were concerned they couldn’t find [another] home to buy,’’ said Richardson. “Now because of high prices people want to sell first to be competitive and have money for a down payment.’’
Washington, D.C.-based Redfin agent Stuart Naranch agrees that selling a home first gives repeat buyers more leverage when they search for a second home.
“Buyers want to do everything possible to be competitive,’’ said Naranch in a statement. “One way to do that is avoid making an offer contingent on the sale of their current home.’’
Buyers have good reason be concerned by rising home prices. According to Redfin’s most recent Housing Market Tracker, median home prices nationwide increased by 5.8 percent over the past year.
Redfin’s Tracker also indicated home sales in July were up by 13.4 percent from the previous year.
Locally, Redfin’s Tracker had both bad news and slightly better news for homebuyers in the Boston market. The bad news is Boston’s housing inventory saw a 4 percent drop over the past year, which means fewer homes available to buy.
The better news: median home sale price in Boston are not rising as fast a they are around the country. According to Redfin, median home prices in Boston rose by 2.9 percent to $379,700, about half the pace of the national average.
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