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Goodbye Seller's Market?

Posted by Scott Van Voorhis July 14, 2014 09:06 AM

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For-sale and open-house signs have been popping up right and left. If this was April or May, it wouldn't be all that surprising. But we are now in sweltering mid-July, the dog days of summer and traditionally a dead zone for open houses and new listings.

Certainly the latest reports back up this anecdotal evidence, with the number of homes for sale finally starting to rise after a years-long drought.

So after years of fence sitting, some sellers are taking the plunge, hoping to snag a buyer while prices are still rising and the market is hot.

However, whether they know it or not - and here's betting most don't - sellers are hitting the market just as it starts to shift. Sure, it's still a seller's market, especially in Cambridge, downtown Boston and the pricey inner suburbs, but there's a lot of real estate beyond 128.

Home sales in Massachusetts and across the country have been faltering for months now.

Only the hangover effects of a years-long shortage of listings are keeping prices on the rise.

Yet, here's the rub: If the market is weakening, seller expectations aren't. In fact, sellers are still dreaming of hitting the real estate jackpot, egged on by a couple years of rampant home price inflation, a Redfin survey shows.

Roughly 40 percent of prospective home sellers surveyed by Redfin in May said they planned to list their homes above their market value.

"Prices have moved down and then up so much over the past five years that it's even more difficult for sellers to have a realistic baseline for what their homes are worth in the current market," Redfin Chief Economist Nela Richardson notes in a blog post on brokerage's website.

Maybe. Or maybe some sellers are just deluded. After all, it's hard to think objectively about the real value of your home, especially in the Boston area, where just about everyone winds up paying a small fortune for four walls and a roof.

If sellers haven't caught up with the changing market, then agents have.

Less than a quarter of Redfin agents across the country agreed with the statement that "sellers have all the power." That's down from 35 percent at the beginning of the year.

Goodbye seller's market?

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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