Mortgage interest rates are low, the sellers’ market is causing home prices to soar another 5 percent, unemployment has decreased and there are a lot of buyers looking for homes.
Facing an extreme sellers’ market in my area, Realtors are frustrated. Why aren’t sellers listing? Where are the homes for my buyers?
Buyer agents and their clients are encountering multiple offer situations, offers far over asking price, high cash offers, and no chance to offer before sold – in some areas homes sold within hours or before the MLS hits the Internet.
What is holding sellers back in this incredible market? Seems to me that the top reasons to SELL NOW blasted all over the news do not address the reasons why people want to stay in their current homes.
One reason not to sell is that homeowners like where they live. We are encountering this issue here in Rochester, Shelby Township and Lake Orion. We have the lakes, the shopping, safe neighborhoods and great schools – why leave?
He’s another hurdle: If a seller is considering putting his updated ranch on the market for $250,000, he needs to prepare to pay over $300k for a larger home that may need a little work. Huh, that’s a tiring thought after all of the work he has put into his current house. What he wants may not be available, bigger isn’t always better, and the sticker shock may keep him away. He starts to think his current house isn’t so bad after all.
The thought process continues to go around and around. Sellers think their houses need work before they can sell because they watch too much HGTV, or a someone has told them they will get low-balled if the house isn’t updated. If buyers can pony up more money to pay over asking price/appraisal, they can certainly afford to pay for new carpeting or kitchen counter tops. Even if the home is in the FHA price range of $280k or less, buyers know they will update when they can afford to do so since buyers have very little savings for the purchase. The extreme shortage of homes still puts the home that needs some work into an advantageous selling position.
“We will die in this house,” was a quote from a gentleman who I thought would like to consider selling his house. The house was very large for two elderly adults and it needed extensive work. The thought of having any house payment other than annual taxes after so many years of not having a mortgage is not always feasible/acceptable for people on fixed incomes. Even if they sold the house and cashed in the equity to purchase a smaller, more manageable home/condo, the thought of the moving process can be overwhelming and costly.
My husband and I are on the fence. We are the “house needs more work” and “we like where we live” people. We are also becoming “empty-nesters in a large house.” If we could find the elusive, affordable ranch with a pole barn on acreage with a short commute, we might light a fire under our behinds to sell — but the ranch might sell before we can get to it.
Ruth Berklich is a buy/sell Realtor with Keller Williams Rochester-Troy, MI (248) 609-8000