Would-Be Sellers Deterred by Rising Home Prices
A recent Redfin survey of 1,800 active home sellers found that many are holding back from selling their homes because they are expecting the values of their homes to rise in the near future.
According to the survey, 38% of the home sellers asked said they plan to hold off on selling their house for over a year, while only 25% of the active sellers are planning to sell now. 36% of respondents plan on waiting 3 to 12 months before listing their home.
“The would-be sellers we surveyed have made it clear that inventory is not going to meaningfully increase any time in 2012, which will limit sales volume gains-and the lift that real estate delivers to the economy this year,” said Redfin CEO Glenn Kelman. “We believe the main problem is not, as conventional wisdom would have it, that people can’t sell because they’re underwater on their mortgage. The problem with sales volume is that most home-owners just don’t want to sell.”
A majority of the respondents said they view the current real estate market as being favorable to Buyers because of recent trends and statistics showing low home prices. These same homeowners expressed an overall optimism for the future increase of home prices, and therefore believe they can get more money out of their home by waiting a year or more to sell.
As a result of an increase in rental prices, many home owners (46%) are considering renting their homes instead of selling. Redfin claims that this is actually driving down housing inventory as many homeowners are buying new houses and renting their current ones.
Also according to the survey, the biggest concerns for sellers this year was the economy (49%), foreclosures (34%), financing trouble (30%), and the anticipation for prices to rise (28%).