Now that we’re in the homestretch of 2016 (really, we are!), consumers are starting to plan for 2017, especially if they want to buy or sell a home. We regularly ask our users about their home-buying or -selling journey, what motivates them—and what’s holding them back. This time of year, the pool of prospective sellers shifts toward those who are just starting their research but expect to sell in the spring.
The desire to sell is there, which should be good news in a market that’s short on for-sale housing inventory. But sellers face challenges, too.
We’re seeing a wide range of motivations for selling. The top six are reasons selected by at least 15% of the sellers:
Those reasons are an interesting mix of “moving up” and “downsizing.” The reasons that have the biggest increases compared with last year are retirement and lowering the cost of living.
This is a good sign that more homeowners may be motivated in the year ahead to sell their homes. A lack of inventory has been the biggest problem buyers faced for most of the past year. To frame the problem, consider these stats:
- August is typically the peak in inventory in a given year.
- In 2014, active inventory on comprised 2.1 million residential listings. In 2015, we had 1.9 million listings, which was a year-over-year decline of 9%.
- This year we had 1.7 million active listings in August, a decline of more than 8%.
Got the picture? Here’s the rub: Just being motivated to sell doesn’t mean you can.
The top impediments cited by homeowners are the perceived necessity of making improvements to their home and purchasing a new property first.
One in six self-identified sellers feel like they need to find their next home before they sell their existing home. We estimate that 85% of sellers intend to both buy and sell. So then they find themselves in the same situation as home buyers across the nation, who are faced with a shortage of homes for sale. And so the circle is complete.
So the lack of housing inventory is a chicken-or-the-egg dilemma: Buyers can’t find a home because there aren’t enough on the market (which is also driving up prices), but sellers, while motivated by the higher prices, can’t sell because they’re afraid that they’ll end up homeless. Meanwhile, new home construction is growing but not enough to ease the logjam.
At this point, traffic on our site and users’ purchase intentions point to continued growth in demand next year, but we still don’t see any signs of the negative supply trend changing.
If you are one of the millions planning to both sell and buy next spring, start your research now. Find an expert local Realtor® to help you determine what improvements may be necessary and get the work scheduled.
We’ve already seen a big shift in the composition of buyers, indicating that more first-time buyers are likely to enter the market in the year ahead. It’s likely that some of them will be interested in your home, which will give you the chance to fulfill your desire for a change.
If you are considering selling your home anytime soon make sure you know what questions to ask of the real estate brokers you speak to.