It's a good time to buy, but is it a good time to sell?
A new study finds that 80% think it's a good time to buy a home, but only 7.6% think it's a good time to sell — at least at current prices.
One challenge facing prospective homebuyers is the difficulty of finding a house in a good neighborhood in good condition.
Prices continue to decline, but so does the number of homes for sale.
New research gives us one reason why: Buyers may think it's a good time to buy, but sellers don't think it's a good time to sell.
A study for the Mortgage Bankers Association's Research Institute for Housing America found that nearly 80% of Americans think it's a good time to buy, but only 7.6% think it's a good time to sell.
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The feelings of homebuyers are the same as in previous recessions, but the sentiments of sellers are different this time, Syracuse University professor Gary V. Engelhardt wrote in a special report titled "The Great Recession and Attitudes Toward Home-Buying." He writes:
What distinguishes the current recession is the dramatic decline in home-selling sentiment. From 1992 through 2005, positive home-selling sentiment fluctuated between 40% and 60%. Since 2005, sentiment has dropped precipitously, to around 7% currently, even while homebuying sentiment remains high.
Nearly two-thirds of those who expressed negative selling sentiment listed "difficulty of finding a buyer" as the reason. Engelhardt suggested that what they mean is the difficulty of finding a buyer at the price they want.
Mike Litzner, who owns Century 21 American Homes in Long Island, N.Y., says real-estate agents have to educate sellers on what price their home is really likely to fetch now. "If sellers really want to sell, they adjust their expectations to the changed realities," he told syndicated columnist Kenneth R. Harney.
If the sellers won't face reality, the agents sometimes decline the listing rather than waste time marketing a home that won't sell at the desired price.
Some agents are writing price-reduction clauses into contracts with sellers, which authorize automatic price reductions if no action occurs in the first few weeks.
Are sellers refusing to face reality? Or are they smart to keep their homes off the market now?
We have tried to sell our home twice during the past 3 years and ended up taking it off the market both times. Both times we listed it at the market price the real estate agent recommended. The second time we actually sold our home only to have the buyers back out 5 days before closing. We have since decided to stay in our home for the next couple of years or so. There is so much negative print about house prices declining, etc. I wonder what would happen if someone in the know, like Barbara Corcoran, would write an article about how the market has stabilized and actually prices rising in most areas. Everyone goes by what's in the media. Do you think this idea might work? Certainly couldn't hurt.
We are senior citizens and are from the generation that thought that the profit out of selling your home in retirement would be added to your assets. That is not the case anymore, so this is not the time for us to sell. Someday, but not now.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.