An uncertain economy and low inventory are bringing out conservative tendencies in sellers
Home sellers may dial back prices a bit due to concerns over the economy, the low inventory and buyers being more selective in their home purchases, according to a new Redfin survey of 2015’s fourth quarter market.
Fifty-seven percent of home sellers stated that in 2016, they plan to price their property in the middle range compared to other homes in their area. This was an increase of 7 percentage points over the Q3 2015 survey. Additionally, only 32 percent said they would price high, down from 34 percent.
Economic Concerns Drive Housing
One possible reason for those shifting sentiments is concern over the general state of the economy. Thirty-three percent of sellers said that economic conditions could be something that would discourage buyers. The low inventory also was a concern, but in an intriguing manner – 30 percent of sellers were unsure if they could find another home they would want as buyers, after selling their current home.
Indeed, inventory and pricing has continued to be a problem on both ends of the spectrum. For some time now, inventory has charted well below the recommended 5- to 6-month supply of homes for a balanced housing market, and thanks to a giant shift towards luxury development that few Americans can afford, new construction has not been much help. With fewer new homes to buy, and sellers viewing existing-home quality as lagging, it may take time and more change in the market before sellers will thaw on the idea of being buyers as well.
All those trends led to benevolence from sellers in Redfin’s survey – while less respondents said it was a bad time to sell (10 percent in 2015 Q4 compared to 13 percent in Q3), there was no change in the amount of people who thought it was a good time to sell (34 percent in both surveys). Slightly more people did think it was an “okay” time to sell (48 percent versus 46 percent).