Highlands Ranch Real Estate : Americans Eager to Buy
The Daily Real Estate News recently posted a summary of an article from the Mortgage Bankers Association (December 2011) which they titled, "Americans Eager to Buy, Sellers Aren't Happy? which we found interesting and wanted to share with you.
Nearly 80 percent of home buyers say now is a great time to buy a home, but sellers say it's not a great time to sell, according to a new study. "The Great Recession and Attitudes Toward Homebuying," released this week by the Mortgage Bankers Association. In fact, homeselling sentiment has fallen to record lows.
As for home buyers, they certainly have plenty to be happy about - housing prices have fallen and interest rates are at record lows, pushing affordability to record levels and allowing buyers to snag great deals on housing.
But sellers, on the other hand, are getting discouraged that they can't find buyers for their homes at a desirable sales price as well as the large overhang of mortgages past due or in foreclosure, according to the report.
"In economic terms, as market values have fallen, potential sellers have not adjusted their price expectations downward fast enough to bring buyer and seller sentiment in line with one another," Gary Englehardt, a professor at Syracuse University who authored the study, said in a statement.
Sellers still can't accept that their home values have fallen and they are no longer able to get the prices from the past, according to the study.
Meanwhile, "despite high unemployment and slow economic growth, the bulk of American households believe that now is a good time to buy a home," Englehardt said. The strongest positive sentiments toward buying was found among young, educated, white and Hispanic households, according to the study.
"The pattern of home-buying sentiment during the current recession looks very similar to that of past recessions," Englehardt notes. "Home buyer sentiment falls as the unemployment rate increases, and improves as job growth returns and housing becomes more affordable. What distinguishes the current recession, though, is the dramatic decline in home-selling sentiment. From 1992 through 2005, positive home-selling sentiment fluctuated between 40 and 60 percent. Since 2005, sentiment has dropped precipitously, to around 7 percent currently, even while home-buying sentiment remains high."
Fascinating stuff isn't it?! We are seeing this reluctance everyday in our business even though we here in Colorado, and especially in Highlands Ranch, have not experienced the staggering home value drops the rest of the country has. In fact, in many instances, the homes we've helped our clients sell in Highlands Ranch have experienced appreciation in their value rather than a decline.
Just this week we had a gal call who needs a larger home but is reluctant to put her house on the market, even though she's lived there many years and owes considerably less on the home that what it will sell for, because that projected sales price is less than she expected. Could she improve that projected sales price? Yes she could with some improvements, i.e. carpet, granite counter tops, leaving the question each home seller faces, "Do I/we want to invest in the sale of our home?".
Regardless of what their situation, what Kathy and I try to remind sellers is that even though their home may be worth less than they expected, when they put on their "buyer's hat" they're going to find that the home they purchase will also be priced in accordance with the market. And when you factor in the incredible interest rates, still hovering around that 4% mark, in the end you will most likely come out ahead of the game.
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