As part of “Listapalooza,” Realtor.com [1] has released a slew of new data showing that potential sellers should think about preparing their home to sell now, during the time leading up to the traditional market frenzy that occurs starting in late spring to the end of summer.
According to Realtor.com, 64% of prospective sellers anticipate doing so within the next six months, and expectations are high for record profits on their potential sales.
Still, the expected uptick in newly-listed homes indicates that much-needed relief could be on the horizon for buyers, especially first-time homebuyers as more Millennials are preparing to sell their starter homes and move up in the market.
This data comes from a survey commissioned by Realtor.com and conducted by HarrisX [2], a market research firm. HarrisX interviewed collected the responses of 3,000 individuals from Feb. 16-18 of this year. The demographics of the sample was chosen to be roughly representative of the demographics of the nation as a whole.
The survey also found that of the 3,000 consumers that responded to the survey, the determination on when to list their house was the longest stage of the home selling process.
"Our survey data illustrates the importance of helping empower homeowners to take control of the listing process, by providing information about market conditions, prices and seasonal trends, like the best dates to list your home. While sellers are expected to hold the upper hand in 2022, navigating the listing process remains a challenge—particularly for those also buying in today's fast-paced market," said George Ratiu [3], Senior Economist and Manager of Economic Research at Realtor.com. "Homeowners who are ready to move forward with pandemic-delayed plans will find plenty of opportunity this Spring and Summer. Although accelerating inflation is leading to higher housing costs and living expenses, many buyers remain interested in finding a home. At the same time, recent housing trends suggest demand is beginning to moderate as higher mortgage rates push monthly payments out of some buyers' budgets, underscoring the long-term need for more affordable inventory."
Homeowners are ready to take advantage of the spring and summer buying seasons
Again, the survey data indicates that the near-record low amount of inventory the market is currently seeing will improve in the next six months as 64% of prospective sellers anticipate selling within the next six months.
Potential sellers also indicated that they are getting their properties ready for sale with the expectations that currents trends will continue, which means high offer prices, quick closes, waived appraisals or inspections, and more.
- The majority of 2022 prospective sellers plan to list within the next six months, with 9% already listed and the remaining getting ready to list within the next 30 days (11%), 1-3 months (24%) or 4-6 months (20%).
- Compared to those who planned to list last Spring, this year's prospective sellers have higher expectations of the hot housing market, including asking for more than their home is worth (42% vs. 29%) and refusing to pay for repairs or improvements (28% vs. 24%).
- When asked why they're planning to list in 2022, surveyed sellers' top reason was wanting to profit off the current market, tied with their home no longer meeting their families needs (each at 31%).
- Homeowners' motivating factors behind moving also reflect the impact of pandemic trends, such as wanting different features after spending so much time at home (15%) and no longer needing to live near their office (14%).
Millennials are moving on up, signaling more starter homes for first-time buyers
As the oldest Millennials are now pushing 40-years-old, these homeowners play a key role in adding starter-home inventory to the market. Millennials represented 49% of sellers who plan to list within the next six months. This should be welcome news for first-time buyers who typically buy these starter homes, but they should still expect fierce competition for these homes.
When combined with rising affordability concerns as both home prices and interest rates climb, the survey offered hope for first-time homebuyers based on:
- More millennials plan to list within the next six months than in March 2021 (75% vs. 66%), and account for a higher share of all 2022 prospective sellers (42.0% vs. 26.0%).
- In a further sign that older millennials are moving on up from their starter homes, the share of surveyed millennials who have sold a home before was nearly as high as the overall rate (61% vs. 64%).
- Millennials have plenty of financial motivation to stick to their plans, with top reasons for selling reflecting the pressures of rising inflation and economic uncertainties. Compared to all survey respondents, higher shares of Gen Y sellers want a more affordable home (34% vs. 21%) and need the sale money ASAP (14% vs. 11%).
- In a potential sign of more starter homes coming onto the market, the majority of 2022 prospective sellers expect to list in relatively affordable price ranges: $350,000 or less (43%) and $351,000-$500,000 (22%).
Recent experiences highlight the importance of preparation, even in a seller's market
Over the last two years, the housing market throughout the course of the COVID-19 pandemic has largely favored sellers, not buyers. In order to prepare for a sale, buyers are increasingly making repairs, cleaning, and decluttering in preparation for showing the home to buyers.
Although many sellers are able to list their homes quickly, 41% of those that have reported that the listing process took longer than they had planned for one reason or another.
- Over half (53%) of sellers spent less than a month preparing their home for listing, while another 26% said the process took 1-3 months.
- Forty-one percent of recent sellers said getting their home ready to list took longer than they expected. Determining the right time to enter the market took longer than any step of the home prep process, with 38% of respondents reporting that this decision took more than 3 months.
- Among steps successful sellers took to prepare their home for listing, top responses included repairs and updates (59%) and cleaning and decluttering (67%). While minor cosmetic updates were the top repair sellers made before listing, at 53% of respondents, nearly as many fully repainted interiors and replaced flooring (47% each).
- The majority (80%) of recent sellers sold at or above their asking price. Other top benefits of the competitive market included: buyers forgoing repair concessions (28%), offers within a week (27%), and waived contingencies like inspections (25%).
Listapalooza, was created by Realtor.com earlier this year, branding the week they traditionally release and analyze data predicting when the best week for sellers to list their houses will be. This year, that week was determined to be April 10-16 due to predictions of high buyer demand, strong home prices, quick sales, and less competition.
Designed around a marketing campaign, the week features the release of survey data, insights, and resources to help sellers prepare for the process and understand their options. It was also named a “national holiday” by the National Day Archives [4], a website that tracks and promotes events such as “Talk Like a Pirate Day” (Sept. 19) or National Cat Day [5] (Oct. 29).