Americans desperate to buy a home or trade up from their current home gave up on some of their most desirable requirements, with nearly one-quarter of home buyers confessing that they were unhappy with their final decision.
That’s according to a survey of more than 1,000 home buyers by Clever Real Estate, a platform that matches buyers with agents. Home buyers bought homes with less square footage (38%), expanded their search location (36%).
Some 88% of respondents said the competitive housing market affected their purchasing decisions, with 36% of those surveyed saying they fast-tracked their plans to buy a home — due to fears of prices and interest rates rising even higher.
“After previously buying in ‘normal’ market conditions, repeat buyers were 75% more likely than new buyers to be dissatisfied, but the market left much to be desired among first-timers who struggled to find affordable homes,” the report said.
“Some 88% of respondents said the competitive housing market affected their purchasing decisions, with 36% of those surveyed saying they fast-tracked their plans to buy a home.”
What’s more, those polled said they paid a median amount of $495,000 for their home — approximately 15% more than the national median price of $428,700. Nearly one-third of repeat and first-time buyers paid over the asking price.
“Paying over the asking price is 11% more common among first-time buyers, who are also more likely than repeat buyers to offer more,” it added. “First-timers paid a median of $77,500 over the listing price, while repeat buyers offered $60,000.”
There may not be an immediate reprieve or buyers on the sidelines. “We’re witnessing a housing recession in terms of declining home sales and home building,” said Lawrence Yun, chief economist at the National Association of Realtors.
New home sales fell 12.6% to a seasonally-adjusted rate of 511,000 in July, from a revised 585,000 in the prior month and down 26.9% on the year, the Commerce Department said Tuesday. Sales peaked at 1.04 million in August 2020.
“One-third of buyers searched for three months or more for a house, 80% of buyers made more than one offer, and 1 in 3 actually submitted an offer sight unseen.”
Yun said this “recession” bears little resemblance to the subprime crash in 2008. “It’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
Properties remained on the market for 14 days in July, the lowest number of days since National Association of Realtors began tracking this in May 2011. That was unchanged from June, and down from 17 days from the same period a year ago.
The Clever Real Estate survey suggested that it’s still very much a seller’s market. One-third of buyers searched for three months or more for a house, 80% of buyers made more than one offer, and 1 in 3 actually submitted an offer sight unseen.
Making an offer sight unseen is fast, but not without risk, it added. “Buyers forgo the opportunity to see the home’s true condition and, instead, rely on second-hand information, such as online photos or the opinion of a real estate agent.”