Photo: Robert Clark
Tight inventory and fierce competition have American homebuyers bracing for one of the most competitive spring homebuying seasons in years.
But according to Realtor.com, many potential homebuyers remain confident that they will close on a home this spring despite the challenging market conditions.
Only two days into spring, and the housing market is already “heating up,” says Realtor.com Chief Economist Danielle Hale in the digital release.
Buyer demand is “booming” but inventory is tightening. National inventory levels have fallen annually for the last 42 consecutive months. There were 8.5 percent fewer homes for sale in February compared to the same time last year.
Homes are selling quicker, too, signalling further evidence of increasing demand. On average, homes spent 83 days on the market in February — a record for that month.
And, much of this intensifying demand is coming from “holdover” buyers from last summer (and beyond), according to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research and Realtor.com.
Some 40 percent of respondents have been shopping for more than seven months and an additional 34 percent have been in the market for four to six months.
“Holdover buyers hoping for greener pastures this spring are likely to find sparse options that require them to pay top-dollar or make other concessions,” says Hale.
Many homebuyers anticipate a competitive market this spring, with 35 percent of respondents saying they expect “a lot” of competition this spring. And, another 36 percent of respondents are expecting to see “some” competition.
This “could explain why many seem to be approaching the housing market strategically,” Realtor.com says.
As far as strategies go, 42 percent of respondents said they are checking online listings daily and 40 percent say they intend to put more than 20 percent cash down. Only 6 percent of respondents revealed that they have no strategies planned for tackling the market this spring.
Still, buyers seem to be cautiously optimistic about their odds — 34 percent of respondents expect to close on a house in four to six months, while 15 percent expect the process to take longer than a year.
“The majority of buyers are aware of the tough competition they’re up against this spring. Having been in the market awhile, they’ve likely lost a few homes to better offers, which has given them more time to save and up their bidding strategies,” adds Hale.
Click here to read the entire release.