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Redfin: More Buyers Expect Price Gains, Few Concerned over Fiscal Cliff

The number of homebuyers who think the price recovery will continue through 2013 has more than doubled throughout 2012, according to ""Redfin's"":http://www.redfin.com/home latest Real-Time Homebuyer Survey.


The survey--a companion to the quarterly Home-Seller Survey and Agent Survey--reflects the opinions of 1,084 active homebuyers across 18 U.S. markets who have toured a home with a Redfin agent since mid-August.

According to the company, 71 percent of homebuyers believe prices will increase in their neighborhood in the next year, up from 61 percent in the third quarter and more than twice the 34 percent in the first-quarter survey.

Additionally, the number of buyers who are considering holding off on their purchase to see if prices will drop declined from 29 percent in the first quarter to about 5 percent in the fourth quarter.

The increase in buyers expecting price gains brought with it a shift in financial concerns: The number of those who listing rising home prices as a major concern increased quarter-to-quarter from 23 percent to 33 percent in the latest survey. Meanwhile, the number of those who say they are concerned about a weak economy dropped to 22 percent from 27 percent in the third quarter.

About 59 percent say low inventory is their top concern with buying right now, consistent with last quarter's rate.

Even with the fiscal cliff dominating the news cycle throughout most of November and December, very few buyers listed it as a cause of concern. Five percent of buyers are seriously concerned about the cliff and about potential changes to the mortgage interest deduction, and only 23 percent are being more cautious in their home search while they wait to see how the situation plays out.

""Low interest rates"" remains the most commonly cited reason to buy now, though the number of respondents citing it dropped 7 percentage points to 57 percent.

Redfin also noted an apparent change in the makeup of the homebuying population. In the period between the first- and fourth-quarter surveys, the percentage of buyers who are also potential home sellers doubled from 8 percent to 16 percent. Meanwhile, the percentage of first-time homebuyers dropped from 48 to 37 percent, turning around years of increases.

Redfin ""blogger"":http://blog.redfin.com/blog/2012/12/economic_concerns_melt_away_for_home-buyers_rising_prices_seen_as_more_certain.html Tim Ellis said the shift indicates the start of a larger trend and forecast 2013 as ""the year of the move-up buyer, which bodes well for inventory improvements.""

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