The mercury is not the only thing plunging this fall. The number of for-sale signs is also in free fall across Greater Boston.
It's a pattern that has been building for months. And the big question is why.
Well a new survey by the Massachusetts Association of Realtors suggests many sellers are holding out for a very simple reason, the hope of getting a higher price if they wait.
OK, I won't go so far as say I told you so. But it is an issue we have been debating now for weeks on this blog.
MAR asked its members "why homeowners who were thinking of selling were still keeping their homes off the market?"
Here are the responses - I've cut and pasted from the press release here.
- Homeowners holding off for higher prices -- 41.8%
- Concerns about the economy -- 20%
- Can't sell because home is "underwater" - 13.6 %
- Lack of homes to buy after they sell -- 8.2 %
- Waiting until after the presidential election -- 5.5 %
- Sellers don't believe inventory is actually low -- 3.6%
- Other -- 7.3%
Of course, while it may be frustrating for buyers, why shouldn't sellers hold out for higher prices?
Sorry, but the argument put forth by MAR probably won't cut it for sellers who are on the fence right now.
"We need to continue to encourage those folks, who may be reluctant, to put their homes on the market," said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport, noted in the press release on the survey. "Having a good supply of homes in all price ranges is very important for a real estate recovery."
But if I am a seller, all I need to do is worry about is my own situation - it's not my job to keep the real estate market balanced.
In fact, as the number of homes on the market drops, it is only putting upward pressure on price. So, if I am a seller, why not hold out?
The best argument instead is one no trade group interested in promoting sales would ever embrace: Cash in while you can now or risk getting stuck if the economy goes into reverse again next year.
At the least it's a possibility that should be considered.
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