Why homeowners are keeping properties off the market
By Quentin Fottrell
At a time when people are clamoring to buy real estate, many homeowners remain reluctant to put their properties up for sale.
Roughly 75% of Americans feel now is a better time to buy than next year will be, according to a survey of more than 2,000 respondents carried out by real estate marketplace Trulia. But despite rising prices, only 32% believe now is a good time to sell. “The unwillingness to sell does help explain the low inventory,” says Susan M. Wachter, professor of real estate and finance at The Wharton School at the University of Pennsylvania. Inventory is down by as much as 15% year-over-year, according to Realtor.com, but picked up by 2.4% in March over the previous month.
Sellers may be trying too hard to time the market, experts say. “The unwillingness to sell is a bit surprising based on the hard facts of many markets that make it an excellent time to sell now,” says Daren Blomquist, vice president at market researcher RealtyTrac. “It’s human nature to want to sell at the very top of the market and buy at the very bottom.” In hindsight, he says, buyers too would have found much better deals in most markets in 2009, 2010 and 2011, when prices were still dropping, than they would now that prices are rising.
The ones putting their homes on the market now may not have a choice. “Some just cannot hold out further,” says Lawrence Yun, chief economist for the National Association of Realtors. Many people who have new jobs, want to be in a different school district or have other changes in family circumstances will put their houses on the market first, he says.
To be fair, would-be sellers face more difficult decisions in a recovering housing market than buyers, experts say. But that doesn’t mean it’s worth waiting. “House price increases will dampen when the Fed starts to raise rates again,” says Stuart A. Gabriel, director of UCLA’s Richard S. Ziman Center for Real Estate.
