HomeLight, the real estate technology platform helping top real estate agents and their clients compete and win, is publishing its 2022 End of Year Buyer & Seller Insights Report surveying individuals across the United States who bought, sold, or owned a home in 2022. The report highlights how sellers will need to sharply adjust expectations through the end of the year and into 2023, while many buyers — especially first-timers – will face a new wave of opportunities as the market continues to shift.
“Rising interest rates, low inventory, and mixed signals from the market have put today’s buyers and sellers to the test,” said Caroline Feeney, HomeLight’s Executive Editor and the author of the report. “The importance of working with a great real estate agent — someone who can ensure you maximize home value as a seller or find a great deal as a buyer — has never been more important.”
“Boomerang” sellers are waiting for lower interest rates to sell in 2023
The housing market could see a lift in inventory from sellers who tried and failed to sell in 2022 due to unrealistic expectations or waiting too long to list their home — and a rise in buyers who took a pause as interest rates began to climb.
According to the report, 67% of attempted sellers say that they plan to return to the market in 2023, while 72% of attempted buyers report the same, despite the continued rise of interest rates. The percentage is even higher among Gen Z buyers (79%) and millennial buyers (69%) who say they took a pause in 2022.
Sellers faced a variety of challenges in 2022, with nearly half (44%) ultimately having to delist and relist their homes in order to:
- Increase the value of the home through staging, updates, or renovations (16%)
- Update / improve their home’s marketing materials (14%)
- Reduce their price (13%)
- Fix a house that suffered weather damage (13%)
- Regroup after a layoff, rescinded offer, or salary change (13%)
“In 2023, boomerang sellers should invest more time into choosing the right real estate agent,” said HomeLight top agent Kelli Griggs of El Dorado Hills, California. “The biggest mistake I saw last year was sellers choosing an agent who only tells them what they want to hear. Those homes then sat for months and had price reductions. Investing in an experienced agent who can help you navigate today’s market — and will be creative about how you list, like with trade-in programs — will ultimately help you get top dollar.”
For the first time in 2022, fewer buyers feel like they overpaid for their home
As a silver lining of 2022, buyers are having fewer regrets about the condition and price of their home. 18% of buyers said they wished their home was in better condition, down from 23% who said they compromised on home condition in 2021 in a previous HomeLight survey. Only 17% felt they overpaid for their home, down from 22% the year prior.
In 2022, buyers reported prioritizing the following to make the most of their purchase:
- 30% had sellers complete repair requests or provided a repairs credit at closing.
- 25% say the deal was closed on their preferred timeline.
- 21% negotiated a lower price. Those who negotiated a lower price reported saving $49,843 off the list price on average.
“The new year brings opportunities and more protections for prospective buyers. If you’re looking to join the market, you need to let go of 2021 to 2022,” said top HomeLight agent Taylor Wilson of Denver, Colorado. “One of the biggest components buyers missed out on during this time was paying over appraised value and waiving all contingencies. It’s time for buyers to grab their power back by being picky with what homes they choose, reintroducing bargaining with sellers, and jumping straight into the action.”
Gen Z preparing to buy their first home in 2023
In 2022, 16% of buyers surveyed were between the ages of 18 and 25, an unusually high number for Gen Z. In 2021, NAR reported Gen Z only made up for 2% of the buyers.
Additionally, unlike older buyers, Gen Z shows higher inclination to use innovative tactics and newer home financial products in order to afford a home, such as cash offer programs (29%), equity sharing with roommates (26%), or using additional income from a second job / side hustle (29%).
Meanwhile, millennials continued to outgrow their first homes and are now looking to upsize in 2023 (30%). In order to afford a down payment due to rising interest rates, one quarter (25%) of millennials utilized a different method of alternative financing – asking for a family member’s assistance when making a down payment.
Move over kitchens and bathrooms — renovating your home’s outdoor space is the new money maker
In 2022, 26% of buyers said a desire to have their own yard or outdoor space made them want to buy a home, eclipsing the need for more overall space (24%) and the ability to decorate, update, and renovate (22%).
For boomerang sellers, focusing on their home’s outdoor space will position them for success in the new year. 29% of homeowners surveyed completed an outdoor landscaping project in 2022, making outdoor projects as popular as kitchen remodels (29%) and only slightly less popular than bathroom remodels (31%).
All in all, 2023 may provide the clarity buyers and sellers are looking for to act more confidently rather than keep testing the waters. For all findings, download the full report.
Methodology
HomeLight’s Buyer & Seller Insights Survey for End of Year 2022 was fielded between September 19 and September 30, 2022, through an online poll of 928 members of the U.S. population who bought, sold, or owned a home in 2022. HomeLight partnered with a third party research panel to provide survey respondents.
About HomeLight
HomeLight is building the future of real estate — today. Our vision is a world where every real estate transaction is simple, certain, and satisfying for all.
The best real estate agents rely on HomeLight’s technology platform to compete, win, and ultimately deliver better outcomes to homebuyers and sellers during every step of the real estate journey, whether that’s enabling an all-cash offer, unlocking liquidity of their existing home to buy a new one, or creating certainty through a modern closing process. Each year, HomeLight facilitates billions of dollars of residential real estate business on its platform for thousands of agents.
Founded in 2012, HomeLight is a privately held company with offices in Scottsdale, San Francisco, New York, Tampa, and Seattle, with backing from prominent investors including Zeev Ventures, Menlo Ventures, Group 11, Crosslink Capital, Bullpen Capital, Montage Ventures, STCAP, Citi Ventures, Google Ventures, and others.
For additional information and images: homelight.com/press.
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