Massachusetts Logo

Back

It's Becoming a Seller's Market: So, Where are the Sellers?

By Eleanor Boschert

Prices are ticking upward. Housing inventory is lagging. Buyers are looking. So, where are the sellers? Sitting on the fence. While you sigh with frustration over the scarcity of housing inventory, take a peek into the minds and pockets of sellers and be ready to act when they finally take the leap and enter the market.

Nationwide, the supply of existing homes for sale has fallen for seven straight months, hitting an almost eight-year low in January 2013, reports the National Association of Realtors. Why?

Falling Prices

Many potential sellers have been watching to see just how low the housing market would go to bottom out. Nobody wants to have to sell at the lowest point. They think that if they wait long enough, prices will bump back up and they'll get more for their homes.

Hunker Down Mentality

For whatever reasons, sellers have sat on their investment, waiting out the recession. Maybe they were anxious about their job stability, income, and making any risky moves. Maybe they were just content to stay put during uncertain times.

Fiscal Constraints

Many homeowners can't afford to sell because they don't have enough equity to put into buying another house. Estimates are that 45% of homeowners have less than 20% equity, making them house rich, equity poor. Then there is the crisis of the "underwater" homeowner. Negative equity, or when a home owner owes more on a mortgage than it is worth, will prevent a seller from being able to obtain financing to move up into a higher market. And, with tighter mortgage standards, people looking to move have to jump through even more hoops for a loan.

Declining Foreclosures

The supply of distressed houses on the market is slowly thinning as the foreclosure crisis recedes. New home numbers, while improving, are still at low levels. This tightens the market, creating a dearth of homes and further challenges for sellers who want to move or re-locate.

Or maybe, sellers are playing it smart. They're just are waiting as prices climb. Get the most for their investment. Then they will act. Eventually, rising prices will drive sellers to jump off the fence. Demand will continue to grow with re-surfacing investors and renters ready to leap from the expensive rental market to homeownership, and buyers taking advantage of low interest rates, clamoring to scoop up those homes finally coming onto the market.

Share this:

Comments

Leave a comment:

* Login in order to leave a comment. Don't have an account? Join for Free



About The Author

Become an Expert Contributor

Have some knowledge to share, and want easy and effective exposure to our audience? Get your articles or guides featured on Mass Realty today! Learn more about being an expert contributor.

Learn More