After a year of heated competition in the housing market, the balance of power between buyers and sellers is shifting. In a survey of 900 Redfin agents across the country conducted last month, only 6 percent believed sellers held all the power, down from 36 percent in the first quarter.
Perhaps even more significant, the number of Redfin agents saying sellers and buyers have equal power is the highest recorded since we first asked agents in the fourth quarter of 2013. Twenty-eight percent of agents surveyed said there is an equal balance of power in their market, up from 12 percent in the first quarter.
“You wouldn’t know that the balance of power in the market is shifting by just looking at prices and inventory,” Redfin San Diego agent Jordan Clarke said. “However, buyers’ attitudes are changing dramatically. There are more bidding wars now than there were this time last year, but more homes aren’t selling for above asking price. Once the price gets too high buyers just walk away.”
Sixty-five percent of offers written by Redfin agents in San Diego faced bidding wars in October, up from 49 percent a year earlier. Yet the average sale-to-list price ratio remained virtually unchanged at 97 percent, which means most sellers are not getting their full asking price. A similar trend is occurring in Los Angeles, Fort Lauderdale and Denver among several other major metros. Buyer demand remains high, but it isn’t resulting in a windfall for sellers.
As buyers push back, the share of Redfin agents who think now is a good time to sell has fallen to 58 percent, the lowest level recorded by Redfin in three years.
“Sellers tend to look backward, while buyers mostly look ahead,” Redfin Chief Economist Nela Richardson said. “As a result, more than a quarter of home sellers had to drop their prices in October. However, seller expectations will eventually come down to what buyers are demanding. It’s still a good time to sell, but just may not be as lucrative as many sellers hope.”
Redfin agents tell sellers what buyers really want
As the balance of power in the market shifts, using the proper strategy is crucial for sellers to get a quick and successful sale. Here’s what our agents had to say:
- 85% of agents surveyed said staging can improve a home’s chances of selling.
“Staging is absolutely worth it. It can cost a few hundred dollars if you use your own furniture, or several thousand if you need to furnish an entire home. Staged homes sell faster and for more money.” — Carie Cox, Redfin agent in Chicago.
- One in four agents said buyers want an open floor plan.
“There’s high demand for homes with historic charm that also have a modern, open floor plan. You don’t need a fully renovated home to bring in buyers; just knocking down a wall to open up the living space will really make your property stand out.” — Adam Heater, Redfin agent in Northwest Seattle.
- 35% of agents said millennials are looking for a short commute.
“It’s more expensive to live near transit. But most buyers, especially my millennial clients, think it’s worth the additional cost. If your home is in a neighborhood with a high Transit or Walk Score, it’s essential to highlight that to buyers.” — Steve Centrella, Redfin agent in Washington, D.C.
- 57% of agents said sellers have an unrealistic expectation of their home’s value.
“The key to selling your home quickly and for the most money is pricing it correctly on the first try. Demand is still very strong, but buyers just won’t show up if you set your price too high. Those days are over, at least for now.” — Sylva Khayalian, Redfin agent in Los Angeles.
About the survey
This survey was conducted between Nov. 3 and 9, collecting responses from 901 Redfin real estate agents. Respondents spanned markets in 38 states across the U.S. View the complete list here.