As the housing recovery downshifts from last year's pace, the latest survey of real estate agents by national brokerage Redfin finds homebuyers and sellers are having trouble getting on the same page with each other and with the new shape of the market.
Examining a number of markets nationwide, Redfin's quarterly survey showed house sellers continue to lose their market advantage, with only 24 percent of agents agreeing with the statement "Sellers have all the power." In the first quarter, that share was above one-third of agents.
Most sellers don't seem to have gotten the memo, though, with 40 percent still planning to list their homes above market value even as sales figures continue to fall compared to last year and home price increases level off.
"Typically it takes seller six to nine months to adjust to a price change, but this latest shift is longer," said Redfin chief economist Nela Richardson. "Prices have moved down and then up so much over the past five years that it's even more difficult for sellers to have a realistic baseline for what their homes are worth in the current market."
Redfin cautioned sellers against overpricing homes in May, especially as shoppers regain leverage in the market. In fact, 58 percent of Redfin agents now say sellers have unrealistic expectations about the value of their homes compared to 49 percent last year.
While slowly improving inventory levels may still push some buyers into more aggressive offers, as Richardson explains, "The demand side of real estate is moving from 'please take my offer' to 'take it or leave it as you please.'"
Meanwhile, homebuyers appear to have traded one set of problems—low inventory and economic uncertainty—for another: affordability and financing challenges.
According to survey responses, the greatest hurdle for buyers today is declining affordability, with 43 percent of agents citing that as a common challenge. Also commonly cited were problems saving for a down payment (18 percent) and difficulty and getting a mortgage (16 percent).
Given these concerns, 40 percent of Redfin agents surveyed in the second quarter said now is a good time to buy a home, down from 46 percent during last year's spring.