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Betting market has turned, millions of "sidelined sellers'' ready to jump in

Posted by Scott Van Voorhis May 21, 2010 08:56 AM

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We could see millions of homes flood the market over the next several months amid a rise in homeowner confidence, finds.

Roughly 7 percent of those polled in Zillow's quarterly homeowner survey said they were "very likely" to put their home on the market over the next year if they see signs of signs of improvement.

That would mean another 5.3 million homes hitting the market - more than were sold across the country last year and adding to a growing glut of millions of foreclosed and distressed properties.

And that's not counting the even greater percentage of homeowners polled by Zillow who said they were either "likely" or "somewhat likely" to put their home on the market. If you add up everyone who is thinking about putting their home on the market, to one degree or another, you come out with nearly 30 percent, a stupendous number.

That's a heck of a lot of "sidelined sellers," as Zillow calls them, daydreaming about putting up a for-sale sign.

Once again, there's a big mismatch here between what prospective home sellers see happening in the real estate market and the less inspiring reality.

Inspired by a surge of tax-credit-fueled sales this spring, the ever bullish American home seller is ready to roll the dice again in the greatest casino of all, the real estate market.

But the odds, after shifting in favor of sellers this spring, are likely to turn again in favor of buyers now the $18 billion home buyer tax credit is history.

As I blogged yesterday, just look at what the Fed is saying. According to the minutes of the April 28th meeting of Federal Open Market Committee, the Fed is concerned the housing recovery has "stalled out."

Meanwhile, homeowners in the Northeast were pretty realistic about the current value of their homes, actually underrating it.

But when it comes to market expectations over the next six months, Northeastern homeowners lead the pack in optimism, with more than 51 percent believing their home's value will rise.

Go figure.

This blog is not written or edited by or the Boston Globe.
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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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