The spring buying season is expected to be driven by record-breaking inventory lows and a flood of buyers, including those who were unable to snag a home last year. According to a new realtor.com survey of active buyers, this season is expected to be one of the most competitive in years.
The survey showed that competition will be driven by booming buyer demand, homes spending less time on the market and a falling inventory that has been decreasing for 42 consecutive months and is currently down 8.5 percent from a year ago.
“We’re only a few weeks into March and already seeing the market heat up,” said Danielle Hale, chief economist for realtor.com. “Holdover buyers hoping for greener pastures this spring are likely to find sparse options that require them to pay top-dollar or make other concessions.”
A large portion of active buyers has been looking for homes longer than anticipated, with 40 percent searching for a home for more than seven months. Around 34 percent have been searching for four to six months and 26 percent have been looking for three months or less.
Buyers revealed strategies they are using in order to stay ahead, revealing 42 percent are checking listing websites every day, 40 percent are planning to put 20 percent cash down, 33 percent are setting price alerts and 26 percent are willing to offer above asking price. The survey also showed that only 6 percent will forego any tactic to cope with competition.
Despite the competition, buyers remain optimistic and are willing to stick it out for their dream home. The survey found that 19 percent of buyers expect to close within three months, 34 percent expect to close in four to six months, 18 percent anticipate seven to nine and 15 percent anticipate the process taking 10 months to more than a year.
“The majority of buyers are aware of the tough competition they’re up against this spring,” Hale added. “Having been in the market awhile, they’ve likely lost a few homes to better offers, which has given them more time to save and up their bidding strategies.”