Millennials ditching starter homes will boost summer inventory
As home prices continue to explode amid an intensifying inventory shortage, homebuyers’ primary source of hope this spring and summer comes from homesellers who are expertly planning their sales within the next six months.
In Realtor.com’s latest housing report published on Wednesday, the portal said 64 percent of prospective homesellers plan to list their home by October. Nine percent of those homesellers have already listed their abode, while 11 percent aim to jump into the housing market at the beginning of May. However, a significant share of prospective homeowners (44 percent) have a longer timeline of two to six months.
“Whether these sellers follow through with their plans will be key to the forecasted 2022 inventory recovery and critical for buyers hoping to find a home before mortgage rates climb even further,” the study said of the predicted uptick in seller activity. “In a positive sign that homeowners are serious about listing, many sellers are already getting their home ready.”
The two primary motivations for selling are new familial needs (31 percent) and the desire for updated features (15 percent), which is no surprise as the majority of sellers planning to make a move are millennials ready to ditch their starter home for bigger digs (49 percent).
Older millennials who are in their late thirties to early forties will likely lead the listing charge, Realtor.com said, as 61 percent of millennial respondents said they’ve sold a home at least once before. This group of sellers plans to offer relatively affordable listings, with 43 percent asking for $350,000 or less and 22 percent asking for no more than $500,000.
However, millennial sellers could find themselves in a precarious situation as buyers. Compared to all survey respondents, higher shares of millennials want a more affordable home (34 percent vs. 21 percent) and need the sale money ASAP (14 percent vs. 11 percent) to help offset inflation and other economic burdens, such as student loan debt.
Although more sellers are coming onto the block, Realtor.com noted that might not result in a price break for most homebuyers. Even more so than last year, homesellers are planning to list for more than what their home is worth (42 percent vs. 29 percent) as buyers continue to forego repair concessions (28 percent), make offers within a week (27 percent), and waive contingencies like inspections (25 percent).
Despite the scales still tipping in sellers’ favor, the report warned against skipping listing preparations such as minor cosmetic upgrades or repairs. Sellers who made updates (59 percent), cleaned and decluttered (67 percent), or fully repainted interiors and replaced flooring (47 percent) had the best outcomes.
“Sellers’ experiences highlight the importance of preparation, especially as buyer demand is beginning to moderate,” the report explained.
Realtor.com Senior Economist George Ratiu said the upcoming months will offer opportunities for buyers and sellers alike. Still, it will take the expertise of a real estate agent to reap the most benefits.
“Our survey data illustrates the importance of helping empower homeowners to take control of the listing process by providing information about market conditions, prices and seasonal trends, like the best dates to list your home,” he said. “While sellers are expected to hold the upper hand in 2022, navigating the listing process remains a challenge – particularly for those also buying in today’s fast-paced market.”
“Homeowners who are ready to move forward with pandemic-delayed plans will find plenty of [opportunities] this spring and summer,” he added. "Although accelerating inflation is leading to higher housing costs and living expenses, many buyers remain interested in finding a home.”