A new Bright MLS survey of 450-plus agents indicated that seller concessions have increased in the Mid-Atlantic housing market. Those interviewed consisted of agents who have worked with sellers in the past six months across the Bright footprint.
Close to two in five of agents’ clients offered credit for needed repairs that were discovered during home inspections, and another 30.1% offered closing cost assistance. Other less-used concessions include rent back from buyer (23%), home warranty (15.8%), lowered price due to appraisal (8.9%) and buying down the mortgage rate (3.6%). Almost a third of all sales transactions in January 2024 included concessions.
“With inventory still sparse and prices continuing to rise, sellers continue to hold the upper hand in the Mid-Atlantic,” said Bright MLS Chief Economist Dr. Lisa Sturtevant. “However, the days of waiving inspections and sellers not entertaining concessions are over. In a market where many buyers are still struggling with affordability and a lack of homes for sale, this is somewhat of a silver lining.”
According to the report, over 75% of surveyed agents indicated that a buyer stopped or paused their home search in the last six months. While 67% of those who left the market were influenced by mortgage rates, 55.9% exited due to lack of available homes and 53% were buyers unable to compete with cash offers—or could not make an offer that landed.
“The subscriber survey focuses primarily on successful transactions,” Sturtevant shared with RISMedia. “Yet agents and brokers work with many clients, and some don’t end up making a purchase. It is quite common for potential buyers to pause or stop their home-buying journey.
“Elevated mortgage rates tend to be the most influential factor holding them back,” she continued. “But at least half of the agents replying to our survey stated that high home prices, a frustration from unsuccessful offers and struggling to find the right home pushed potential buyers to the sidelines.”
According to the data, agents expect buyer activity to increase as the spring nears. Fifty-seven percent of agents surveyed presume that buyer activity will be high—or very high—in the next three months.
“Agents are optimistic about the spring market,” Sturtevant told RISMedia. “The expectation is for rates to drop in 2024 and for buyers to be motivated to join. Falling rates should also incentivize sellers; however, the lock-in effect will hold some back. More importantly, sellers are considering whether they will be able to purchase another home if they sell their current one in today’s tight inventory environment.”
In terms of whether or not sellers will return to the market, agents are not as hopeful, as 40.2% expected low to very low seller activity in February, up from 34.7% in January.
Key data:
Time buyers spent looking for a home according to surveyed agents:
- Less than a month: 74 (18.8%)
- 1 to 2 months: 89 (22.6%)
- 3 to 6 months: 118 (29.9%)
- More than 6 months: 100 (25.4%)
- Not sure: 13 (3.3%)
Type of homebuyers according to agents surveyed in February:
- First-time homebuyers: 162 (41.6%)
- Repeat homebuyers: 218 (56%)
- Not sure: 9 (2.3%)
Did mortgage rates influence your homebuyer(s)’ decision to buy now?
- No, they bought with cash: 86 (21.8%)
- No, they were going to buy regardless of interest rates: 175 (44.4%)
- Yes, but mortgage rates were just one factor, and not the main factor, in their decision to buy: 91 (23.1%)
- Yes, they wanted to lock in a rate now: 24 (6.1%)
- Other 8: (2%)
- Not sure: 10 (2.5%)
How many homes—including the one purchased—did your buyer(s) make an offer on?
- 1 home: 182 (46.8%)
- 2 homes: 84 (21.6%)
- 3 homes: 61 (15.7%)
- 4 homes: 33 (8.5%)
- 5 homes: 8 (2.1%)
- 6 homes: 11 (2.8%)
- 7 homes: 2 (0.5%)
- 8 homes: 4 (1%)
- 9 homes: 1 (0.3%)
- 10 homes or more: 3 (0.8%)
- Average number of offers: 2.2
