Forty-One Percent of Real Estate Agents Say Buyers and Sellers Will Have Equal Power in 2015
As economy continues to improve, 77 percent of agents believe now is a good time to buy, according to Berkshire Hathaway HomeServices Fox & Roach, REALTORS® Survey
Despite the slow recovery of the national real estate market, 55 percent of regional real estate agents feel that the Greater Philadelphia real estate market is progressing at a better rate than the national market and 56 percent feel the market will be stronger by the end of 2015, according to a survey released today by Berkshire Hathaway HomeServices (BHHS) Fox & Roach, REALTORS®. The online survey of 662 BHHS Fox & Roach agents in the Greater Philadelphia area was conducted from December 2014 through January 2015.
The balance of power is equalizing as the market gets stronger, with 41 percent of agents reporting that buyers and sellers will have equal power in 2015.Thirty-nine percent of agents think that buyers will have the power in 2015, down from 50 percent last year. Agents feel positively about current regional market conditions for both buyers and sellers, with 77 percent reporting that now is a good time to buy, 48 percent feel it is a good time to sell, and 64 percent say that real estate is a good investment.
General Market Predictions
According to regional agents, the top home buying trends for 2015 include:
The average age of homebuyers will be younger (51 percent)
Energy efficient appliances and amenities will be more important (45 percent)
Walkability will be very important (36 percent)
Access to quality schools (69 percent), large kitchens (63 percent), and number of bathrooms (57 percent) will be the most important features for buyers in 2015. Finished basements (38 percent) and the age of the home (35 percent) were also ranked highly.
Fifty-five percent of agents predict that homebuyers will want homes that are less than 10 years old, while 13 percent say homebuyers will want older homes, nine percent say buyers will be looking for inexpensive homes that need to be fixed, and only eight percent believe that homebuyers in 2015 will be looking for new construction.
2015 will see a continuation of the slow and steady growth the market has experienced over the last few years. “When market growth is too fast, it can create a bubble which will eventually burst,” said Larry Flick, Chairman and Chief Executive Officer, Berkshire Hathaway HomeServices Fox & Roach, Realtors and The Trident Group. “Steady, reasonably paced growth is advantageous for the stability of the overall market.”
Low mortgage rates are expected to increase over the next several years, motivating buyers to act quickly to get pre-approved for mortgages prior to making offers. “The Philadelphia market will gain more widespread traction in 2015, in that many neighborhoods and communities which have been left behind by the recovery will finally start to pick up,” said Kevin Gillen, PH.D., Senior Research Consultant at the University of Pennsylvania’s Fels Institute of Government. “However, it is important to keep in mind that a return to a normal rate of price appreciation and historically average sales volumes indicates a balanced market, not a hot market.”
Pricing continues to be an issue for sellers and buyers. “Properties that are priced right and show in excellent condition are selling quickly, many times with multiple offers,” said Larry Flick when asked about his most important advice to those selling their homes. “Properties that are not in good condition or where functional obsolescence has not been taken into consideration in the price will sit on the market. Buyers are using their heads, not their hearts, when making decisions. They will walk away from a property if they feel it is not a good value, no matter how much they like it.”
For first time homebuyers, 37 percent of agents predict that lack of funds for a down payment will be the biggest challenge in 2015. Twenty-five percent of agents predict existing debt, specifically student loan debt, will be the greatest issue, while 12 percent say it will be bad or lack of credit. Nine percent of agents feel it will be the lack of understanding about the process of buying a home that will be the number one challenge for homebuyers in 2015.
The Tech Effect
The role of the Internet in real estate continues to grow, with 91 percent of agents reporting that the internet is the primary tool for their clients when they first look for a home. Only three percent said that consumers seek guidance from their agents as their primary resource.
Sixty-three percent of agents feel that online tools available to consumers make their jobs easier, while 22 percent feel that it has made their job more difficult and 15 percent have not felt a difference. Agents cited that information on popular real estate sites is often incorrect and the abundance of available data is overwhelming and confusing to a lot of their clients.
“The internet gives consumers the opportunity to come to our sales associates with more knowledge about what is available for sale, thus making the search process shorter,” said Flick.“However, only professional realtors have the experience and knowledge to help consumers wade through all of the information, and determine what is necessary to allow them to make smart decisions.”