Timing the market is never easy, no matter what that market is. That’s probably why so many American homeowners looking to sell are uncertain when they should put their properties up for sale.
A recent survey of 1,700 homeowners by Redfin found that 55 percent of prospective homesellers have no plans to sell, and 28 percent said they’d like to sell but are jittery about timing. The ratio has been more or less consistent all year, which Redfin attributed to the one thing all housing insiders seem to agree upon‒‒inventory is persistently low.
“Low inventory continues to be a sore spot for the housing market that is likely to continue into 2017,” said Redfin chief economist Nela Richardson. “We have seen some improvement in single-family new construction recently, but that’s not enough to meet demand from first-time buyers looking for affordable homes.”
Richardson said that mortgage rates are likely to remain at historical lows in 2017 and that could encourage homeowners to convert the equity that they built during the housing recovery by trading up to a more expensive home.
“This creates a virtuous life cycle of homeownership by adding more affordable inventory to the market that is within reach of more first-time buyers,” she said
While tight inventory is actually a sign of a seller’s market‒‒which an overwhelmning number of survey respondents said they found 2016 to be‒‒the issue is that many looking to sell are also looking to move to larger or more expensive properties. When asked if now is a good time to sell in their neighborhoods, 42 percent told Redfin that it was. A mere 8 percent said it was a bad time to sell.
But the concern is not a matter of being able to get rid of an existing home as much as it is not being able to find another one. When asked what they think will happen to home prices in the coming year, 68 percent of respondents told Redfin that they expect prices to increase in 2017. Only 5 percent said prices will fall. A year ago, 71 percent of respondents reported prices would climb in 2016.
“The irony doesn’t escape me when I say home sellers are in a tough spot right now, since the market seems to weigh so heavily in their favor,” said Lorella Martin, a Redfin real estate agent in Austin. “Many people move out of necessity, but those homeowners who would like to sell in order to upgrade to a larger and nicer home are on the fence. As prices continue to rise, most prospective home sellers ask me two key questions: ‘is now the best time to sell?’ and ‘how difficult will it be to find another home?’”