BAM Key Details:
- The results of a new Opendoor survey reveal an inconsistency in housing market expectations, along with areas where buyers and sellers can meet in the middle.
- Buyers and sellers shared their top concerns, their home price predictions, and their plans and predictions regarding home offers.
Data from a new Opendoor survey is shedding some light on how buyers and sellers see the housing market, what their top concerns are, and what they can agree on.
Given 72% of sellers are also buyers, it’s not earth-shattering news that both sides are often willing to see things from the other side’s perspective—and make concessions to speed things along. After all, the harder it is to buy a home, the more difficult it is for buyer-sellers to move ahead with a sale.
It’s also true that, while both sides do share some concerns, buyers and sellers generally approach a home purchase/sale with a different set of objectives.
That said, according to Opendoor’s survey data, there seems to be a disconnect on both sides between what people feel about the market and what they’re doing.
Here’s what you need to know.
Three things buyers and sellers agree on
Opendoor’s survey data shows buyers and sellers agree on three things in particular:
- Both believe the market is competitive (mainly due to low inventory)
- Both are concerned about interest rates
- Both think homes are overpriced
Despite that third point of agreement, the fact is people are still transacting. Buyers are competing for fewer homes available—particularly those that are affordable.
Also, buyers and sellers alike are more willing to make concessions, and, depending on who you ask, express varying degrees of optimism about the housing market.
Across the U.S., the share of inventory clearing the market (i.e., selling) each day is around 3%, which is a strong sell-through rate. In fact, homes are selling more quickly in 2023 than in 2019—a year that brought an increase in new construction, improved affordability, and a boost in home purchases.
This is where the disconnect comes in, per Opendoor’s survey data: what buyers and sellers feel about the housing market doesn’t match up with what they’re actually doing.
Top housing market concerns for both buyers and sellers
Part of the survey assessed housing market concerns among prospective buyers and sellers. Here are the top three concerns shared by both:
Some buyers and sellers concerned about the economy may hesitate and ultimately decide to postpone their move.
Three things that differentiate these buyers and sellers from those still transacting:
- Those postponing (56%) are more likely to point to housing affordability as one of their top two concerns—compared to 48% of those not postponing their move.
- Only 43% of postponers have at least 50% equity in their homes, while 53% of active movers have 50% or more.
- Only 20% of postponers are likely to own their current home outright, compared to 30% of active movers.
Higher equity and greater wealth overall gives buyers and sellers more flexibility for moving, not to mention the ability to make more competitive offers. This is why, for many of those actively moving, higher interest rates are less of an issue when it comes to finding their next home—especially if they need to move.
According to the survey data, concerns about the housing market—and particularly interest rates—increase with age:
- 86% of Baby Boomers
- 77% of Gen X
- 75% of Millennials
- 62% of Gen Z
While respondents didn’t seem alarmed by the severe shortage of housing supply, 72% did express concern about housing affordability—which is largely determined by the relationship between supply and demand, as well as mortgage rates.
Just over one-third of buyers and sellers (34%) cited the lack of housing supply as an issue for them, despite the significant shortage of affordable home construction. That shortage is likely a big factor behind the nationwide home price increases.
It also doesn’t help that so many of our newly constructed homes are priced well above the median, thanks to high regulatory fees and local zoning restrictions.
Home price expectations and predictions
While over 60% of buyers and sellers expect the economy to struggle in 2023, they do differ in their expectations and predictions on home prices.
Regarding whether home prices will go up in 2023, buyers and sellers are evenly split, but the divide increases as we look across generations. Younger respondents were more likely to expect rising home prices compared to those of older generations.
Also, when it comes to making offers on a home, buyer and seller expectations differ widely, with 73% of buyers planning to bid at or below the asking price and 36% of sellers expecting an offer above the asking price.
While these expectations are fairly consistent across age groups, some generations had a larger share of buyers planning to bid on the lower side. Baby Boomers are most likely to be hunting for bargains, with 80% saying they intend to make an offer at or below the asking price. Only 14% are willing to make an offer above.
Meeting in the middle: Concessions both sides are willing to make
Despite that gap between buyer and seller expectations, a clear majority of prospective buyers (80%) and sellers (76%) are willing to make concessions to speed up the process.
The top three concessions both sides are willing to make are—
- Flexibility on the closing date
- Who pays for the inspection fees
- Who pays for closing costs
Opendoor conducted a survey with a total of 833 interviews in March 2023. Respondents were current and prospective (next three years) home sellers and buyers of all demographics, aged 21 to 75.
Read the full report for more details.
Takeaways for real estate agents
Use the visuals and tools at your disposal to show them the advantages and disadvantages (depending on each prospect’s unique situation) of selling or buying a home right now in their local market. And clear up any misconceptions from confusing headlines.
Whatever they decide, at least they’ll be able to see more clearly what their options are.