So here we are, April 2017, when the real estate market is hot in our area and yet, many homeowner's aren't selling their homes. WHY?
- Buyer confidence is up and there are LOTS of buyers who are out looking for homes but can't seem to find the right home because there just aren't enough homes available. When they do find something they like, they are forced into a bidding war and wind up paying more than they are comfortable spending. But DEMAND IS HIGH, which is great!
- Interest rates are still very low and many lenders in our area can still help buyers who don't have perfect credit get into a home.
- Our local economy is good and unemployment is low in this area, plus prices have remained pretty consistent over the past few years.
So even with all of these positives, a lot of homeowners just aren't moving, so here's my opinion (for what it's worth).
- Many homeowners just aren't quite ready to sell yet because they don't have enough equity built up to justify selling. Housing prices have been recovering since the recession, but they haven't recovered enough for homeowners who bought prior to the recession to sell just yet.
- A lot of builders in our area went out of business during the recession and are "gun-shy" to get back into the business. New construction is starting to increase here but the demand is still greater than the amount of new homes available. There just aren't as many builders as there once were and the ones that survived the recession are being more conservative and not having as many spec homes readily available, so buyers have to wait at least 3-6 months before they can get into a new home. That means buyers are turning to existing homes for sale so they can get into a home quicker.
- Some homeowners are still not as confident as they once were, meaning they are holding on to their homes longer. They remember what it was like just a few years ago when they lost some of their equity right after they had just purchased their home and they aren't as eager to jump back into the market.
- There are still SOME homes that have been sitting on the market for awhile. Those are usually the homes that are either overpriced, have some sort of repair issue or are outdated and that's keeping them from being as attractive. Buyers are being more conservative and doing their homework to make sure the price is a good value for them. They also prefer homes that are "move-in" ready and don't need repairs nor updates.
These are just some of the issues I have seen in our local market. Having a seller's market is typically a great issue, we just need a little more inventory in order to help with the recovery of home prices.
The Knoxville, TN area doesn't typically see the major price increases that sometimes occur in larger metropolitan areas but instead, we usually see a steady growth.
I'm curious to find out what other markets across the country are seeing.
Thanks for taking the time to read!