Reluctant sellers hold up the market?
WASHINGTON – Oct. 12, 2012 – As home prices make gains in a number of markets, many homeowners continue to wait, saying they want prices to go up even further before listing their homes for sale. That seller delay has led to tightly constrained inventory levels in many markets, resulting in shortages of available for-sale listings.
Negative equity has caused many would-be sellers to wait out the market. About 10.8 million homeowners were underwater at the end of June, CoreLogic reports. Negative equity often delays homeowners from selling because they need to earn enough from their current home sale to make a downpayment on another home.
“Many (would-be sellers) are waiting for prices to increase more before they can sell, and some sellers are keeping their current homes as a rental investment and buying without selling,” Tom Avent, broker-owner at Tom Avent Real Estate in Fresno, Calif., told Inman News.
Eight out of 10 potential sellers said they believe they can get a higher price for their home if they wait one to two years, according to a survey of 816 homeowners conducted by Redfin. In the survey, only 13 percent said that now is a good time to sell.
“The sellers want to sell high and buy (their next) home for prices that were available six months ago,” Andrea Harrington, an agent at EWM Realty International in Fort Lauderdale, Fla., told Inman News. “When they realize the entire market trends up, they rethink their plans to sell since it may not be as economical.”
Facing inventory shortages, some real estate professionals are even reaching out to homeowners who are sitting on the fence about putting their home on the market.
“Many sellers are still not aware of how strong our market is,” said Charles Roberts, co-owner of Your Castle Real Estate and a director on the Denver Board of Realtors®. “They still think it’s a bad market to sell. Our job is to inform them about the market and explain to them that with a rising market, it has become a strong seller’s market and to walk through their options.”
In many areas, it’s a full-blown seller’s market now, and that surprises many homeowners, adds Jason Lopez, a broker at Atlantic & Pacific Real Estate in the San Diego area.
“Now it doesn’t mean prices are skyrocketing like past cycles, but with the chance of multiple offers, it makes the process more appealing,” Lopez said.
Source: “Fence-Sitters in No Hurry to Sell,” Inman News (Oct. 2, 2012)
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