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Buyers Frustrated by Low Inventory, Rising Prices

Active home buyers are increasingly concerned about rising prices, prompting a growing number to slow down their purchase plans, according to a new survey.

Active home buyers are increasingly concerned about rising prices, prompting a growing number to slow down their purchase plans, according to a new survey.

49% of respondents believe that it’s a good time to buy a home, down from 56% last quarter. The share of buyers who think it’s a good time to sell more than doubled, to 28% of respondents.

Nearly six in 10 respondents said that low inventory remained their top concern with buying right now—by far the most predominant worry of buyers. The supply of homes listed for sale nationally is down by 20% from one year ago, and markets such as Phoenix, Orlando and Oakland, Calif., have around half as many homes for sale as one year ago.

More than seven in 10 buyers said they had faced a competing offer when making an offer for a home.
Given those experiences, perhaps it isn’t surprising that 58% of buyers said they think prices will increase, up from 34% last quarter. Meanwhile, just 9% of buyers said that concerns about falling prices were making them reluctant to buy right now, down from 29% three months ago.

The lack of supply and the uptick in multiple offer situations is surprising to many buyers and could lead some frustrated buyers to stand back. More than one-quarter of buyers said they would stand back from the market if prices went up or they were in a multiple-offer situation, while 10% of respondents said they’d do what it takes to win a competitive bid.

The survey also found that 16% of buyers were worried about fatigue from bidding wars and that 21% were concerned about prices rising beyond what they could afford.

“The overwhelming sentiment among home buyers is that there aren’t enough good homes for sale, says Rehanna Gallagher, Broker owner of Prudential Castle Point Realty. “Who would sell right now if he didn’t have to?”

Inventories are also low because banks have put fewer foreclosed properties on the market. The survey found that 57% of buyers were very interested in conventional sales, up from 48% three months ago. Buyer interest for new homes, foreclosures, and short sales showed little change from last quarter.


Donna Antonucci
Prudential Castle Point Realty
201-240-6832

www.hobokenrealestatemonitor.com

www.search.hobokenrealestatemonitor.com/map/

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Sally McBride June 12, 2012 at 04:13 PM
Where do you get your info? Accorrding to the Associated Press story 2 weeks ago titled "Nationwide foreclosure sales increase", In the first quarter, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first three months of last year, the firm said and Across the nation, the short-sale trend indicates a greater likelihood that home prices will continue to soften, as foreclosures and short sales typically sell at sharp discounts to other homes.
Donna Antonucci June 12, 2012 at 04:29 PM
This was a regional survey of buyers conducted by a Red Fins real estate research group. Observations on a national level may be very different. This also jives with what I and other agents in my office and those that I have worked with have seen these last 2 quarters. I produced the 2011 year in review and Q1-2012 review based on quantitative analysis of the Hudson County MLS numbers Inventory levels in Hoboken and Downtown JC have hovered at about 50% of levels from just one year earlier. Competitive bidding/multi offers are up by multiples. The absorption rate and PPSQFT analysis which I track weekly also supports the survey results. There was also an article from Bloomberg that corroberates the survey results. It's market by market and once again NY having one of the strongest job markets in the country is one of the real estate markets that is doing better than average. Bloomberg article: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/25/bloomberg_articlesM4JNOY0YHQ0X01-M4LEJ.DTL
Sally McBride June 13, 2012 at 01:58 PM
Red Fin covers northen NJ and NYC now? That is good news, but I couldn't see any info about this on their site.
Josie Pitrullo June 25, 2012 at 07:03 PM
100% correct this article threw me off as I am looking to buy in NJ and found this NOT to be the case at all...maybe in Hoboken where home prices became outta control over 15-20 yrs ago as they tore down and bulit back up..and of course its proximity to NYC which I don't give a crap about anyway :P
Josie Pitrullo June 25, 2012 at 07:04 PM
nope I live and am looking in NJ and find this not to be the case at all..slight rise in some area's but lots of short sales and froeclosures out there*

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