Expectation for Prices to Rise Deters Would-Be Sellers: Survey
By: Esther Cho
After surveying more than 1,800 active home sellers, Redfin found that some of its customers are holding back from selling now because they believe patience will pay off in the form of higher offers for their home.
The survey revealed that 38 percent of respondents plan to wait more than a year before selling their home, while 25 percent said they plan on selling now. About 36 percent of homeowners plan on waiting somewhere between 3 months and 12 months.
“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.”
More than a quarter (27 percent) of respondents said now is a bad time to sell as opposed to only 13 percent who said now is a good time to sell. Half of the respondents were in the middle and said now is an OK time to sell.
Most respondents view the market as one that is favorable toward buyers, with 60 percent stating now is a good time to buy and only 3 percent stating now is a bad time to buy.
San Diego homeowner Jane MacKenzie stated, “I’ve carefully tracked prices on comparable homes in my neighborhood, but they have not yet risen to the level at which I’d want to sell; thus my desire to wait until spring 2013 (tentatively) and reevaluate the comps situation. Hopefully by then some of the volatility in the stock market and the U.S./international scary headlines may have settled down a bit.”
Homeowners expressed optimism for future home prices, with 80 percent believing they are bound to get a higher price for their home after a year or two.
The optimism though is somewhat restrained, with 65 percent of respondents believing prices will rise by a little in a year, and just 7 percent believing they will rise by a lot. Twenty-one percent believe prices will stay the same.
With rental prices increasing, almost half (46 percent) of respondents stated they are considering renting out their home instead of selling.
Redfin explained the move towards renting over selling is likely a factor pushing down inventory as would-be sellers buy a new home and rent out their former primary residence.
The biggest concern for sellers this year was the economy (49 percent), followed by short sales/foreclosures (34 percent), financing trouble (30 percent), and the anticipation for prices to rise (28 percent).
Relocation (30 percent) and a life events (30 percent) were the two main reasons homeowners made plans to sell.
The survey was conducted between August 10 to August 15 and included 1,816 people across 20 metropolitan markets.
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