There are people ready to buy homes, but that doesn't mean they want to move into them.
Redfin, the real estate online brokerage firm, reports that 39% of homebuyers plan on buying but turning right around and renting the residence out rather than live in it themselves.
While that does give renters more residential opportunities, it also leads to Redfin's report that homes-for-sale inventory rates are at a "record low."
"Many of my home-buying clients refinanced and locked in a very low mortgage rate over the past few years," says Taylor Connolly, a Baltimore-based Redfin agent. "That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month, so they are going for it."
"My family is in the same boat. When we move up this year, we plan to keep and rent out our current home," he says.
Redfin has more fresh data on the market:
- 25% of homebuyers believe it is "a good time to buy," compared with 40% in February 2013.
- Primary concerns among buyers include a low selection of homes (61%), higher home prices (57%) and more completion from other buyers (53%). Only 40% of last year's buyers were worried about higher home prices.
- Only 10% of homebuyers have taken a home tour so far this year, citing "tight inventory."
Redfin sees a strong home buying market in 2014, but with choosier and more patient buyers.
The speed of homes moving off the market has slowed, with homes staying on the market 41 days in February, up from 35 in December.
"The difference between this year and last seems like night and day," says Redfin agent Eric Tan. "In 2013, listings were flying off the shelves. We'd have 150 people show up and get 20 to 30 offers after just one open house. This year, we're still seeing a lot of people touring, but if the home isn't priced right, it won't sell quickly."
"The market is still fast for homes that are listed at a price that buyers can stomach," he adds.
This article was republished with permission from TheStreet.