Results from Bright MLS’s latest survey indicate that high home prices and elevated rates are shrinking demand as inventory expands.
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Market Survey: Agents and Brokers Optimistic for the Fall Market
Results from Bright MLS’s latest survey indicate that both buyers and sellers should expect negotiation, compromise.
Compromise Will Be Common Among Buyers and Sellers This Fall
With mortgage rates declining over the past few weeks, the housing market may soon pick up the pace. Still, with buyers continuing to encounter affordability challenges and tight supply compared to pre-pandemic levels, both buyers and sellers will need to leave room for compromise.
As indicated in the results of Bright MLS’s August 2024 subscriber survey, sellers often offered a concession as part of the transaction, most commonly by offering credit for repairs or items uncovered during the inspection. Some sellers also provided closing cost assistance.
It isn’t only sellers who are giving up ground during the transactions. Nearly two in five buyers (37.5%) in July had to make some type of compromise on their home purchase. The most common compromise was price, with almost half of those compromising saying they had to concede on price. The second most common compromise was the quality of the home, meaning they may have bought a home that required a bit of TLC compared to one that was move-in ready. The size of the home or number of bedrooms was another area where buyers adjusted their standards. (Survey respondents could select more than one reason for compromising.)
The “other” category of compromises consists of answers ranging from purchasing the home as-is, to not getting the garage space they wanted, or the yard size, or having to adjust the closing date.
Mortgage Rate Movement Is Shifting Sentiment
Market activity is typically slower in the latter half of the year, yet the outlook for the Mid-Atlantic indicates fall 2024 activity may be rosier than last year, according to survey respondents.
Agents and brokers are expecting the housing market to improve in the next three months, likely a nod to the recent rate drops. The seller index, which compares the number of agents and brokers who anticipate high to very high activity in the coming three months to the number expecting low to very low activity, increased from 37.2 in July to 41.2 in August. The buyer index was virtually unchanged at 53.7 in July and 53.8 in August.
In August, the buyer index was 3.5 points below last year. However, the gap has shrunk and could reverse if additional rate movement strengthens buyer expectations. New listings year-to-date have been higher than in 2023, and the outlook for seller activity remains above where it was last year. More inventory has been welcome news for buyers in the Mid-Atlantic.
Buyers Still Face Challenges in the Market
Despite the uptick in outlook this month, buyers in the Mid-Atlantic, as well as throughout the county, continue to face affordability challenges. The latest survey continues the trend, showing the majority of agents and brokers who worked with multiple clients said they had a buyer pause or stop their home search (72.3% in August). For the third month in a row, struggles with home prices or finding a home in their price range edged out mortgage rates as the top reason home shoppers paused their search.
Other buyer challenges beyond affordability relate to the restricted supply available. Inventory has grown but remains tight relative to pre-pandemic levels. Roughly half of agents and brokers reported prospective buyers had frustrations with unsuccessful offers (52.8%) or finding the right home (48.2%).
Even buyers who successfully close on a home note these difficulties. Finding the right home and submitting a successful offer have been the top two challenges for buyers since the question was introduced last year. For buyers who purchased in July 2024, 38.3% described finding the right home as somewhat or very difficult. This compares to 46.3% who purchased in July 2023. Following finding the right home, roughly a quarter of buyers indicated submitting a successful offer was somewhat or very difficult, compared with just 34.1% of buyers a year ago in July 2023. Fewer buyer frustrations relative to last year is likely due to the additional supply; however, that doesn’t mean the pendulum has swung in the favor of buyers.
The Market Pendulum Will Continue Swinging
As mortgage rate movement entices more buyers and sellers, it's hard to predict some of the effects on competition and negotiation. While more buyers would put pressure on prices—possibly elevating them further—high prices would also keep some buyers on the sidelines. In the meantime, decreasing rates could make it easier for sellers to sell—but sellers who also intend to buy could face challenges in finding a home where the grass is greener.
About Bright
Bright is proud to be the source of truth for comprehensive real estate data in the Mid-Atlantic, with market intelligence currently covering six states (Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia) and the District of Columbia. Bright MLS’s innovative tool library—both created and curated—provides services and award-winning support to well over 100k real estate professionals, enabling their delivery on the promise of home to over half a million homebuyers and sellers monthly. In 2023, Bright subscribers facilitated $104B in real estate transactions through the company’s platform.
A total of 636 agents representing recent homebuyers and 752 agents representing recent home sellers responded to Bright MLS’s survey. The survey was conducted between August 8 and August 14, 2024.
Full survey results are available here. More research and analysis on the housing market is available from Bright MLS’s Research Team.
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Results from Bright MLS’s latest survey show that although inventory remains below pre-pandemic levels, supply improvements are easing buyer challenges.
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