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  • Writer's pictureAdrian P.

The State of the Housing Market May 2023: A Look at Buyer and Seller Perspectives

The housing market is a topic of constant discussion and speculation. Everyone wants to know whether it's a buyer's market or a seller's market, and what the current trends mean for their own real estate journey. At Desert Capital Investors (DCI), we surveyed buyers and sellers across generations to gain insights into their mindsets, concerns, and expectations in today's housing market. Here's what we discovered.

Buyers and sellers agree that the current market is tough. There is a consensus that it remains competitive, with both sides expressing concern about interest rates and believing that homes are overpriced. However, it's interesting to note that despite this perception, buyers are still actively purchasing homes at a rapid pace. Homes are selling faster than in previous years, indicating that buyer sentiment doesn't always align with their actions.

Competition is a significant factor, as the majority of buyers and sellers anticipate multiple offers on homes. Younger buyers, in particular, are more pessimistic about their chances of winning their dream home and expect to enter bidding wars. The tight housing supply and the entry of Gen Z and Millennials into the market have contributed to increased competition and a norm of haggling among younger buyers.

Nearly 70% of buyers and sellers believe that homes are unreasonably priced, with a staggering 93% considering homes on the current market to be overpriced. Interest rates rank as the top concern for both buyers and sellers, followed by home affordability and the state of the economy. Economic uncertainties may lead some buyers and sellers to postpone their moves, with housing affordability being a key concern for those opting to delay.

The level of concern varies across generations, with Baby Boomers showing the highest level of concern, likely due to their past experiences with volatile interest rates. On the other hand, Gen Z is the least concerned, reflecting a more optimistic outlook. Millennials and Gen X fall somewhere in between.

Surprisingly, the lack of housing supply is not a major concern for most buyers and sellers, despite data indicating significant underbuilding in the country. Instead, the focus is on low affordability, which is an indirect consequence of the housing supply shortage.

Looking ahead, there is disagreement among buyers and sellers regarding price expectations for the coming year. While some anticipate rising home prices, others hold a more cautious view. When it comes to making offers, buyers plan to bid at or below the asking price, while sellers expect offers above the asking price.

To find common ground, it's crucial to understand what sellers prioritize. Certainty, speed, and cash are key factors for sellers. They want an offer that won't fall through, a quick sale, and the option of a cash offer. Both buyers and sellers express a willingness to make concessions to expedite the process, such as flexibility on closing dates and sharing costs.

Ultimately, the goal is for buyers and sellers, across all generations, to find a home they love and can afford. At DCI, we offer solutions to help sellers and buyers navigate the market with ease. Whether you're a hesitant Gen Z buyer or a motivated Baby Boomer seller, we have the tools and resources to assist you on your real estate journey.

Please note that this blog is based on a survey of current and prospective home buyers and sellers across different age groups. The insights provided reflect the sentiments and opinions expressed by the participants.

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