While home prices are making gains in many markets, many home owners continue to wait for home prices go up even further before wanting to list their homes for sale, Inman News reports. As such, inventory levels have been tightly constrained in many markets, resulting in shortages of available for-sale listings.
Negative equity is mostly at play in causing many would-be sellers to wait out the market longer. About 10.8 million home owners were underwater at the end of June, CoreLogic reports. Negative equity often delays home owners from selling because they need the down payment on their current home to purchase 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, a broker-owner at Tom Avent Real Estate in Fresno, Calif., told Inman News.
Eight out of 10 would-be sellers recently surveyed say they believe they can get a higher price for their home if they wait one to two years to sell, according to a survey of 816 home owners 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 the 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 home owners 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," Charles Roberts, co-owner of Your Castle Real Estate who serves as a director on the Denver Board of REALTORS®, told Inman News. "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 seller’s market right now, and that surprises many home owners, 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 told Inman News.
Source: “Fence-Sitters in No Hurry to Sell,” Inman News