After years of heated bidding wars and homes selling for six figures over the list price, home sellers are entering the spring housing market with “more realistic” expectations.
As the nation enters the best week to list a home, April 14–20, fewer homeowners anticipate bidding wars and wild offers over the asking price, according to a recent survey from Realtor.com® and CensusWide. Homeowners are also expecting their homes will take longer to sell and fewer buyers will waive contingencies.
“Home sellers have adjusted their expectations. They’re becoming a little more realistic given the current market conditions,” says Hannah Jones, senior economic research analyst at Realtor.com. “Home prices and mortgage rates remain elevated, so buyers are going to be a little bit more picky and are going to be looking for more flexibility from sellers.”
While that’s welcome news for many homebuyers, it’s not necessarily a bad thing for sellers.
“The housing market is showing signs of rebalancing,” says Jones. She points out that more homes are going up for sale compared with last year. “The market is moving in the right direction.”
Just 12% of sellers expect their home will receive multiple offers, down from 27% last year. And 15% of homeowners are banking on being offered more than their asking price. That’s less than half of the 31% that expected to receive more than what their home was listed for in 2023.
An additional 15% are prepared to receive an offer within a week of their home going up for sale, down from 37% last year. And another 15% are expecting buyers to waive contingencies, such as home inspections and appraisals, dropping from 35% in the previous year.
“Seller expectations are moving away from the [COVID-19] pandemic frenzy toward more normal, pre-pandemic expectations,” says Jones. “It’s a return to some balance. Although sellers are still in a really good position, this suggests that sellers are open to a little more give and take with buyers.”
The report is based on a survey of about 1,000 homeowners who plan to sell their home in the next year and 1,000 folks who sold their home in the Past year.
What do home sellers in 2024 want?
Homeowners planning to sell their properties this year have been thinking about doing so for an average of two years. When they finally do so, they’re hoping to cash in.
Sellers are expecting their abodes to sell for an average of $462,000 this year. That might be a bit aspirational as the national median list price was $424,900 in March, according to the most recent Realtor.com data.
“The percentage of sellers reducing prices is relatively high,” says Jones. “So sellers may be optimistic coming into the market and then adjusting closer to buyer expectations.”
Almost 8 in 10 recent sellers believe they would have entered a hotter housing market if they had listed their properties earlier. Many waited to get out those “For Sale” signs because of the high mortgage rates.
About 73% of the respondents in the survey are sellers as well as buyers. About 79% of prospective sellers have been reluctant to give up a low rate only to have to take out a mortgage at a higher rate. So they succumbed to the “lock-in effect.”
About half of these homeowners don’t want to sell until rates fall, while 29% are going ahead regardless.
“Plenty of homeowners have been eagerly waiting for mortgage rates to come down so that they can sell their current home and more affordably upgrade to a new one,” Realtor.com Chief Economist Danielle Hale said in a statement.
“With mortgage rates expected to ease slowly throughout the year, some potential sellers are planning to get off the sidelines in 2024 and make a move, with the majority expecting to buy a new home at the same time that they sell their current one.”
Hale anticipated rates will fall to about 6.5% by the end of this year.
Why are homeowners selling their properties?
Homeowners who are planning to list their homes need to move for family (24%), for more space (23%), to downsize (23%), and for life changes (18%) such as a new marriage, child, or divorce, according to the report.
They’re also weighing financial considerations. About 24% are selling to make a profit, and 21% want to capitalize on price increases.
“Life goes on,” says Jones. “We still see that more normal churn in the housing market driven by big life events. Those things continue even in a challenging housing market.”