Seller Confidence Gets a Boost

 

For Redfin, the top answer on its latest Home-Seller Sentiment Survey was a pleasant irony. When asked to list their top three concerns about selling their homes, a quarter of the sellers who responded said they had none.

This was a marked jump in seller confidence, if measured against the last time Redfin surveyed sellers in January. April’s numbers reflect a nine-point jump in unconcerned sellers, and “no concerns” leapt from the eighth-most common answer to the top of the list three months later. There was also a drop in the percentage of sellers worried about finding a replacement home, down from 24 percent in January to 18 percent in April.

Redfin credited a strong selling season in March for the boost in confidence. One measure of increased confidence was that sellers adopted a more aggressive pricing strategy. The share of sellers reporting they would price high because they believe negotiation in inevitable increased almost 6 percent, to 21 percent in April.

At the same time, the firm’s chief economist, Nela Richardson, said prospective sellers have been slow to list their homes.

“New listings dropped 2.3 percent in the first three months of the year compared to the same period last year,” Richardson said. “Would-be sellers are likely waiting for prices to peak; they’re trying to time the market to fetch the largest possible gain.”

Whether this is a good thing is open to debate. Sylva Khayalian, a Redfin agent in Los Angeles, said, “Over-pricing one’s home is a common mistake made in a seller’s market. Especially as we progress through the spring and into the summer months, homeowners see neighbors receive multiple offers and sell for more than their asking price and some assume they can ask for even more.

Another measure of seller confidence is that a fifth of sellers told Redfin they had all the power in a sale right now. That’s up 7 percent from January. Meanwhile, 22.5 percent of sellers said buyers have zero power. That’s up 9 percent from January.

Lest that come across the wrong way, the bulk of respondents put things a little more modestly. Almost 36 percent of sellers said they had a little more power in a negotiation and sale than buyers. And that number was actual down since January. Then, more than 40 percent of sellers had the same thing.

But whether that number dropped because more sellers think buyers have greater leverage or because they shifted their views from “some” to “all” in terms of the power sellers hold is unclear.