Housing is aflame in much of the country, with buyers climbing all over each other in some markets to get at the few homes listed for sale. It’s a seller’s market, with multiple offers and even double-digit price growth in some cities.
So, where are all the sellers?
One answer: They’re stuck in their homes, dying to put the place on the market but unable to figure out where to live when it sells.
It is a strange moment in real-estate history. To sell your home in this suddenly hot housing market puts you in the same tough spot as all the other would-be homebuyers, fighting the competition for a shot at one of the few homes for sale in your area.
Why homeowners won’t sell
While buyers are coming out of their holes after years of waiting and watching, most would-be sellers aren’t yet ready to join the market.
The National Association of Realtors’ chief economist, Lawrence Yun, told The New York Times that two main factors are behind the shortage:
But there are other reasons for the shortage as well. The Boston Globe interviewed
homeowners whose reasons for holding back say much about this moment in the economic recovery.
“Some owners can’t afford to sell because they owe more than their properties are worth, while others aren’t yet convinced it’s the right time,” writes the Globe.
One young family wants a larger house but they can’t sell the starter home they bought at the top of the bubble for enough money to allow them to move. Another couple want to leave their condo and buy a single-family home but the slim pickings on the market so far don’t interest them.
The Globe adds:
John Ranco, a senior sales associate for Hammond Residential Real Estate in Boston’s South End, said many homeowners who couldn’t sell their properties during the recession turned to renting, which currently can be a lucrative source of income in the city. In addition, he said, more Boston residents also have decided to stay in their current homes, lessening the opportunities for newcomers.
Agents trying everything
The frustration is driving real-estate agents to distraction. Realty companies are holding classes for first-time sellers, for example, to educate and encourage them. Since the housing crash, it’s previously been the buyers they were trying to motivate.
Writes the Globe:
Brian Montgomery, a buyer’s agent with Charlesgate Realty Group in Boston, was so frustrated by his inability to find suitable homes for his clients that he recently published a blog post titled: “Desperately seeking sellers.” It included a wish list of nearly two dozen Boston-area homes his clients would like to buy.
“We’re hoping that by publishing this list, an owner may wake up from their amnesia,” he wrote, “and realize they actually want to sell their property!”
Boston Realtor Ken Snyder tells American Public Media’s Marketplace, “There it’s like the last shrimp at the buffet at a cocktail party and everyone’s jumping on it to try and get to it.”
With agents beating the bushes for homes to sell, Snyder was pleased to score a scarce listing, a 1,500-square-foot loft in Boston’s trendy Seaport District.
“Snyder says the owners have been renting the loft but were not planning to sell until they saw a post on his Facebook page about the shortage of homes on the market and bidding wars over new listings,” Marketplace writes.
Reuters spoke with Boston Realtor Gary Rogers, who is dusting off a tactic from years past:
“We’re actually going back to snail mail. We used to have these huge mailing campaigns and I’d drop a thousand dollars a month on mail. It used to be junk mail. Now nobody else is doing it, and all the sudden I’m getting calls.”
Inventory
While these stories focus on the intense demand in Boston, the dearth of sellers is a problem across the country.
Cities that were deluged with foreclosures just a few years ago are now experiencing strong demand. Prices in 2012 rose 7.3% nationally, 8.5% in Denver, 7.2% in Tampa and 23% in Phoenix, writes the Times.
“In my 27 years I’ve never seen inventories this low,” said Kurt K. Colgan, a broker with Lyon Real Estate in the Sacramento metropolitan area, where the share of homes on the market has plummeted by one of the largest amounts in the nation. “I’ve also never seen a market turn so quickly.”
Across the country, the inventory of homes for sale rose 9.6% from January to February, to 1.94 million existing homes, according to the NAR. That’s an improvement but still just a 4.7-month supply of homes for sale, 19.2% less than last year at this time, when there was a 6.4-month supply.
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