The 2013 home buying season should start in early January with strong consumer demand, which paired with low inventory, will keep prices rising in the spring, according to Seattle-based real estate brokerage Redfin.
The prediction is based on the results of its latest survey, which found the number of those looking for a new home who expect the price in their neighborhood to increase over the next year has more than doubled since the first quarter.
These results are in slight disagreement with another recent survey which shows those between 18 and 34 who currently rent still harbor dreams of homeownership, but they won’t enter the market for the next two years.
For the fourth-quarter Redfin survey, 71% responded affirmatively that they believe prices in their area will go up over the next 12 months, versus 61% in the third quarter and just 34% in the first.
Nearly six in 10 said low interest rates are a reason to buy a home now, but this is down seven percentage points from the third quarter and 16 percentage points from the first quarter. The good news is that rates remain the most common motivating factor to get a consumer into the market, Redfin found.
Meanwhile, 59% of the people in the market said they are concerned about the low inventory on homes on the market.
But in what might be a surprise, a mere 5% of buyers are concerned about the fiscal cliff and possible changes to the mortgage interest deduction.