Smart SpendingSmart Spending

Where are the home sellers?

You'd think that rising prices would inspire homeowners to put their homes on the market, but more than money is behind the current shortage of homes for sale.

By Marilyn Lewis Mar 29, 2013 1:12PM

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

Image: Home for sale (© Digital Vision Ltd.)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:

  • Investors who've scooped up foreclosures to turn them into rentals.
  • A devastated home construction industry that has been slow to ramp back up after the recession.

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.

 

More on MSN Money:

27Comments
Mar 29, 2013 3:27PM
avatar

I can't figure out why people aren't rushing to trade 15 years of debt for 30 years of debt either.

Mar 29, 2013 9:33PM
avatar
I'm in Las Vegas.  If anyone offers to pay me what I paid for this house in 2008, I'll sign the deal tomorrow.  Actually, today...what time is it?
Mar 29, 2013 3:33PM
avatar
At least the Boston Globe bought some balance to this article. In many markets foreclosures are just starting to come on the market AND many people CANNOT sell because they are underwater with their mortgages (b/c of cheap, irresponsible credit). I love how they quote the National Association of Realtors economist..What the he!! do you think he is going to say "prices are trending up because of the artificial demand caused in the market created by the cheap, irresponsible debt that created the bubble in the first place." Good grief!!!
Mar 29, 2013 3:30PM
avatar
It's not that there aren't any houses for sale: the problem is that the majority of sellers still think its 2006 in terms of pricing.  Properties that are realistically priced in not terrible locations move quickly...
Mar 29, 2013 10:15PM
avatar
lol Its amazing the articles that are written trying to get us to spend money. The housing industry in America is in terrible shape and it will be years before we recover. No one selling houses?  lol   People are either under water or have given up trying to find a buyer.
Mar 29, 2013 6:31PM
avatar
If this was the case I would be able to sell my home in Virginia but home values are still very low so I would lose about $90,000.00 in order to sell.
Apr 1, 2013 2:44AM
avatar
Who in their right mind would try to sell a house that they mortgaged at $150,000 (in 2004), they still owe about $98,000 on, and a real estate appraiser tells them that the house is currently valued at about $50,000?  Seriously, who writes these crazy article anyways, and what planet are they living on?  Have they not been around for the past six or seven years and seen what has happened to home prices?  I live in Michigan, but I know this is happening all over the country, and I've heard that California and Nevada are particularly hard hit.
Mar 30, 2013 2:22AM
avatar
I'm here in Phoenix, waiting for another 23% increase, next year would be time for me to sell.  Going to he South Pacific and start a new life as Robinson Crusoe. 
Apr 1, 2013 8:29AM
avatar
Let me rewrite the first sentence of this story.

Housing is aflame in much of the country, with INVESTORS climbing all over each other in some markets to get at the few homes listed for sale. It's an INVESTOR'S market, with multiple offers and even double-digit price growth in some cities. 

Meanwhile normal people languish renting being unable to afford a home on their current wages which haven't increased in over 10 years, and dealing with more job insecurity then ever.

Apr 1, 2013 11:09AM
avatar

The banks are holding 2 million underwater homes, why dont they sell some?

 

Oh thats right, they need higher prices.

Mar 30, 2013 2:56AM
avatar
The people buying houses aren't buying to live in them.  They are investors mostly from other countries.  They mostly are investing in the idea that the dollar will come back up after are economy gets better.  
avatar
'A devastated home construction industry that has been slow to ramp back up after the recession...'

Mar 29, 2013 11:05PM
avatar
Who's making out lke a bandit  are professional movers! Have you got a load of their prices? YIKES!!
Apr 1, 2013 12:47PM
avatar

We put our house on the market in Phoenix for $149,500.  We had two offers for $155,000.  We were so excited.  THEN the appraisal came in at $147,000.  How depressing is that!  There were not enough comparable sales to justify $155,000.  Bottom line. . . if the appraisal doesn't come in, someone could offer you $5,000,000. and it wouldn't make a bit of difference.

 

 

Apr 1, 2013 10:53AM
avatar
The value of our house dropped almost $100K since the "peak",we will take a big loss on it but senior citizens like us don't have the luxury of many years to wait for the market to sort itself out. So the less we get selling the less we buy on the other end. With the prices down and the interest rates so good, anybody who can "move-up" now will be a very happy camper 5+ years down the road. The RE market will come around again if you have the foresight, time, money and fortitude to roll with it, The "boom" went bust in the 80's, came back about 20 years later and went bust again, and here we go again......  
Mar 30, 2013 9:44AM
avatar

"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. "

 

Exactly. And, no one in their right mind would buy this house for the price we paid for it in 2007, and, it isn't worth what we owe, now.

 

We got took by flippers. Anyone buying an older house (ours is 76 years old, this year) in the northern climates...please be certain...under that new siding...the house walls are actually insulated. We'd actually be okay if this old house had wall insulation.

Apr 1, 2013 8:28AM
avatar
ANOTHER  ARTICLE FULL OF "B. S." THE INVENTORY IS DOWN BECAUSE MOST OF THE HOUSES THAT SOLD WERE GREATLY UNDERVALUED. THE PRICES HAVE NOT COME UP NEARLY ENOUGH  FOR MOST PEOPLE WHO WANT TO SELL; BECAUSE OF THE CURRENT VALUE TO WHAT'S OWED ON THEIR HOUSE, CURRENT MARKET PRICES "DON'T ADD UP" SO TO SPEAK! 
Apr 1, 2013 12:38PM
avatar
What a crock of bullsheet, period. Just  some air head writing this fiction on April Fool's Day, My My!
Apr 1, 2013 1:48PM
avatar
As a retired RE agent let me try to shed light on bid ups. A home is listed for a value and a bidding up happens on the list price. In my area it used to happen (groan) and now it is happening again.     Four/five years ago the appraisers, and banks could make it work to a degree however not always. Today the market has changed for the protection of everyone involved. If a buyer bids up and buys the home, happens more and more (a bigger groan) the appraisal is KEY. No ifs, ands or buts. The home appraises for asking and the buyer wants the home. The buyer must put down the amount over appraisal in cash over and above the good faith down. Investors do not normally bid up unless the property is offered undervalued.
Apr 1, 2013 1:37PM
avatar

"Housing is aflame in much of the country, with buyers climbing all over each other”

 

This is absolute horse pucky. I now believe that to become a member of the National Association Of Realtors you must first prove you failed a polygraph test, and then swear on a bible that you passed.

 

There are 19 homes on the market in my community of 350 upscale homes less than ten years old which have been on the market for over a year asking below construction cost.

 

You got buyers, bring them on. Otherwise, shut up already.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More