Homebuyers and sellers are struggling to keep up with the rapidly shifting market, according to a Zillow survey of real estate agents, which found many believe home prices will fall steeply in 2023.
Nearly half of the 506 respondents of Zillow’s survey — 46 percent — answered that the biggest misconception held by aspiring homebuyers is that home prices will fall significantly in the near future. Meanwhile, the biggest misconception held by home sellers is that they should wait for high mortgage rates to come down before listing their home, according to 35 percent of survey respondents.
“Buyers may think it’s better to wait out the market, but in reality, there is more opportunity in this market than I have seen in the past five years if buyers approach real estate as a long-term investment, ” Michael Perry, an agent at The Perry Group in Salt Lake City said in a statement. “If prices or mortgage rates take a meaningful dip, all those sidelined buyers will likely come rushing back to the market, driving up competition and prices. If a buyer can purchase today, they have bargaining power, more options, and more time to find the right home, instead of being rushed into a purchase they might regret.”
The survey also found sellers holding onto dated expectations, with 81 percent of agents saying it's common for sellers to still expect multiple offers on their home, 79 percent saying it's common for sellers to expect a quick sale on their home, 79 percent seeing sellers expect a quick sale and 74 percent seeing buyers have no expectation to cut their asking price.
“Sellers can no longer put a for-sale sign outside their home and expect the offers to pour in,” Koby Sway, an agent with The Briley Team in Omaha, Nebraska, said in a statement. “They have to roll up their sleeves and make necessary repairs and home improvements before listing their home for sale. And it’s more important than ever to get the pricing right when competing against other sellers for a smaller pool of buyers.”
Zillow’s research does not foresee a significant drop in home prices the report said, with the firm currently predicting that home values will stay largely flat over the next year, increasing 1.3 percent by September 2023. A lack of new listings will keep upward pressure on home prices, the firm predicts, and mortgage rates are more likely to rise than fall as inflation remains a challenge.
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