While a Redfin Q4 housing-confidence survey determined that only 28% of participants say now is a ‘Good Time’ to buy a home in their neighborhood, this is still an increase from Q3, where a mere 24% of participants answered with the same result. This is still a large drop off from the 2012 Q4 survey, where nearly 50% of respondents believed it was a good time to buy a home in their neighborhood.
Another positive sign for buyers was the drop in respondents who believe it is a ‘Bad Time’ to buy a home in their neighborhood, with only 10% agreeing in Q4, dropping from 14% in Q3. This was the lowest response rate since Q4 2012, when 5% of respondents agreed. Rounding out the survey, 58% said it was an ‘OK Time’ to buy a house, while 4% were unsure, keeping on pace with the Q3 responses of 59% and 3%, respectively.
If you’re looking to sell, Q4 is not the time to do so. Only 46% of respondents agreed that it was a good time to sell, dropping off from 63% in Q3 and the 2013 peak of 66% in Q2. While there was an 8% increase in those responding that is was an ‘OK Time’ to sell (up to 37% from 29% in Q3), those claiming it is a bad time to sell doubled from 5% in Q3 to 10% in Q4.
For the fifth consecutive quarter, Low Inventory is the biggest concern for buyers, with 60% of respondents unsatisfied with the amount of homes on the market. Following closely are Rising Prices (52%) and Rising Mortgage Rates (41%).
The housing marketing looks quite mixed, with buyers slowly trending in a favorable manner, but still not at an ideal position. Sellers are rapidly losing confidence from a strong Q2 and Q3. Looking forward, homebuilders are caught in a rough spot. In fact, award-winning editorial director for the Residential Construction Group, John McManus, is boldly predicting that 2014 will be a ‘fend for yourself’ year. According to McManus “…what will characterize the year ahead will be a ‘you’re on your own, don’t ask me for help’ mode. If you can survive, thrive, and dominate next year, there’s a good little stretch awaiting in the years after that.”
It is crucial for homebuilders to have a strong and detailed plan heading into an unknown 2014. The housing market is constantly changing and unfortunately without many warning signs. SBS Group has a team of homebuilding industry experts that can help analyze your organization with a variety of solutions that can be tailored to your needs. Contact us for more information.