Properties in many cities throughout the country are flying off the market due to lack of inventory, yet many sellers are still hesitant. So why aren’t they selling? Turns out they are facing the same inventory and financial hurdles as potential home buyers.
“REALTORS® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market,” says Lawrence Yun, NAR’s chief economist. “The lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
After speaking with many housing experts and economists, The Washington Post says there are a few main reasons why sellers are still being cautious.
Lifestyle considerations. Many sellers are staying put because they’re unable to retire and want to remain close to their workplace. This segment of potential sellers is also most likely to have millennial or elderly family members move in with them, and they aren’t able to downsize.
Financial reasons. Staying put may make the most financial sense right now for potential sellers, since many have refinanced their homes. The Washington Post also points out that the effects of the housing crisis also linger for many, “Depending on where you live, if you bought between 2004 and 2007, the high point of the housing crisis cycle, you may still be underwater with your mortgage, meaning your house is worth less than the mortgage amount.”
Lack of options. Sure, sellers seemingly have the upper hand, but they face the same problem as buyers: lack of inventory. Many sellers can’t find another home they like, or one they can afford, and are choosing to stay put for the time being.
Source: “5 reasons home sellers are sitting on the fence,” The Washington Post (Aug. 12)