The housing industry is staging a recovery with increasing sales and stabilizing prices, according to a national survey of RE/MAX agents. Four out of five agents believe U.S. home prices won’t decline further. In fact, nearly 70 percent predict prices will go up, led by a strong demand for homes in the low to middle price ranges.
“To active real estate agents, this market is definitely heating up,” says Margaret Kelly, RE/MAX CEO. “They are witnessing a recovery across the country fueled by home buyers and sellers taking advantage of a significant market opportunity.”
Agent opinions are documented in the quarterly RE/MAX Market Insights, an online survey of 1,022 residential experts. Collectively, RE/MAX agents sell more real estate than any other real estate network in the U.S.
Key findings include:
• Price rebound: 68 percent say prices will be higher by the end of 2012.
• Today’s prices: 29 percent below the peak reached during the housing bubble.
• Demand for lower-priced properties: 80 percent of agents say it’s good or very good.
• Demand for homes in the middle-price ranges: 71 percent rate it as fair to good.
• Demand for high-priced homes: 58 percent call it poor to fair.
A snapshot of today’s homebuyers served by RE/MAX agents:
• Roughly one third are first-time buyers. Another third are homeowners looking to sell so they can move up or downsize. The remainder are mostly investors, who believe the market has hit bottom.
• One in five buyers pays cash, receiving an average discount of 15 percent.
The most significant challenges facing first-time homebuyers are having an acceptable credit score, posting a down payment, and facing a shortage of homes for sale. Repeat buyers have the added burden of selling their current home. They, too, are facing a scarcity of homes to purchase in the lower and middle price ranges.
Nearly half of the agents say lower priced homes in their markets are selling for slightly less than the asking price, while 17 percent say buyers are paying full price and 11 percent say buyers are paying slightly more than the asking price.
For homes in the middle-price ranges, 49 percent report sale prices are slightly less than the asking price, while 8 percent say full-price is being paid. For the high-priced homes, 43 percent report that sale prices are moderately less than asking prices, with another 2 percent saying it is slightly less.
With bank-owned homes making up a significant portion of the current inventory, agents report that 62 percent of their non-investor buyers have a favorable attitude toward foreclosures, while only 27 percent have a favorable attitude toward short sales.
“With distressed properties still making up a sizeable portion of homes on the market, this inventory is being cleared effectively by buyers, who don’t mind investing a little to fix up a property in return for an attractive bargain,” Kelly adds.
Among buyers’ highest priorities were quality of schools, and condition and size of the home. The lowest priorities included public transportation, walkability and energy efficiency.
Most RE/MAX agents advise their buyers to hire a professional home inspector and to attend the inspection. Getting pre-approved for a mortgage, not merely pre-qualified, is also recommended.
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