Purchasing a home in a rapidly appreciating and hyper-competitive housing market can feel like winning the lottery. But a new Zillow survey finds even those who are successful often make compromises and can suffer from buyer’s remorse.
Current and aspiring home shoppers can learn from the regrets of these pandemic-era buyers with help from new technology and a housing market that could offer buyers a bit more breathing room.
Zillow found that three-quarters of those who successfully purchased a home in the past two years say they have at least one regret about the home they bought. About one-third of new buyers regret buying a home that needs more work or maintenance than expected. A similar percentage regret buying a home that is too small.
“The pandemic-driven feeding frenzy in the for-sale market added challenges for buyers, especially those purchasing for the first time,” said Zillow population scientist Manny Garcia. “This research suggests many of those buyers ended up in a home that was less than ideal. It’s important to remember that even in a balanced market, most buyers have to make compromises to stay within their budget. However, to minimize regret, aspiring buyers would be wise to establish where they’re willing to compromise and what’s a deal-breaker before shopping.”
What do buyers regret about their home purchase?
Most successful buyers (74 percent) wish they had done at least one thing differently during the shopping process, with 38 percent wishing they had spent more time searching for a home or weighing their options. About one-quarter would have shopped for and purchased a home in a different area.
A vast majority of successful buyers say they had to make at least one compromise in order to afford their home (81 percent). Nearly two in five say they ended up in a location that increased their commute time (39 percent), while 32 percent purchased a home that was smaller than they initially planned to buy.
“Buyers can get distracted by a pretty kitchen or great staging when they should concentrate instead on a home’s two biggest factors: its layout and location. It’s very tough to change both,” said Seattle-based Zillow Premier Agent partner Lucas Pinto, team lead at the Lucas Pinto Real Estate Group, Compass. “A great agent can reframe a buyer’s home search and keep them focused on their priorities, helping them make a confident, informed purchase decision.”
Burned Out Buyers
Buyer burnout has become increasingly common amid rapid home price appreciation. Nearly 60 percent of successful buyers say they took a break from their home search, while 72 percent of prospective buyers say they have done the same. Both prospective and successful buyers who paused their search were most likely to do so because the type of home they wanted to buy became too expensive.
These pandemic-era buyers faced unprecedented conditions. They had far fewer homes to choose from and far more competition for the homes that were listed for sale. Inventory fell to a new low, down more than 40 percent compared to pre-pandemic levels, while home values surged nearly 20 percent in 2021.
Today’s buyers face similar challenges, but in a calmer market, they should have more time to assess their options before making one of life’s biggest financial investments. In June 2021, the typical U.S. home flew off the market in just one week. That time frame has expanded every month since, to roughly 13 days in December 2021. Home values are expected to keep climbing, but Zillow economists predict those values will rise at a slightly slower rate than last year’s blistering pace — 16.4 percent versus 19.6 percent in 2021.
