In Redfin’s latest survey of more than 1,700 homeowners conducted in October, 45 percent said are planning to sell their home, but most of these prospective sellers aren’t sure when they will list. We emailed active users of our home search website and mobile apps who indicated they own a home. Of those who plan to sell, 7 percent said their home is already on the market, and 14 percent said they’ll list within the next six months. Sixty-three percent are not sure when they’ll actually put their home on the market.
Seller indecision has remained a constant theme throughout the year, with similar results reported by Redfin in January, April and July. In effect, homeowners have been saying the same thing housing market data has been reporting for years: inventory is persistently low.
“Low inventory continues to be a sore spot for the housing market that is likely to continue into 2017,” said Redfin chief economist Nela Richardson. “We have seen some improvement in single-family new construction recently, but that’s not enough to meet demand from first-time buyers looking for affordable homes. Mortgage rates are likely to remain at historical lows in 2017 and that could encourage homeowners to convert the equity that they built during the housing recovery by trading up to a more expensive home. This creates a virtuous life cycle of homeownership by adding more affordable inventory to the market that is within reach of more first-time buyers.”
The homeowners Redfin surveyed overwhelmingly agreed that 2016 has been a seller’s market. When asked if now is a good time to sell in their neighborhood, 42 percent of respondents agreed it was, an 8 percentage point increase over the same time last year. A mere 8 percent said it was a bad time to sell, representing a 5 percentage point decline.
So how could it be that so many homeowners surveyed agree now is a good time to sell and yet so few have concrete plans to sell? In a word: prices.
When asked what they think will happen to home prices in the coming year, 68 percent of homeowners said they expect them to increase in 2017 and a mere 5 percent said prices will fall. Homeowners are slightly less bullish today than they were a year ago. When asked the same question in the last quarter of 2015, 71 percent of respondents reported prices would climb in 2016.
“The irony doesn’t escape me when I say home sellers are in a tough spot right now since the market seems to weigh so heavily in their favor,” said Lorella Martin, a Redfin real estate agent in Austin. “Many people move out of necessity, but those homeowners who would like to sell in order to upgrade to a larger and nicer home are on the fence. As prices continue to rise, most prospective home sellers ask me two key questions: ‘is now the best time to sell?’ and ‘how difficult will it be to find another home?’”
In fact, the top two reasons homeowners reported they are either selling or planning to sell their home are that they want to upgrade to a larger and nicer home (36%) and that they want to pull out their profit (23%). However, the two issues that top respondents’ list of concerns about selling is that they will be unable to find a suitable replacement home (32%) and that their property value may fall before they are able to sell (32%).
About the Survey
Redfin emailed its survey to active users of its home search website and mobile apps who have “claimed a home” on the brokerage website. Responses from 1,784 people in 41 states and Washington, D.C. were collected in mid-October 2016. 1,701 people responded that they own a home, of whom 758 said they are planning to sell their home. With the exception of the first paragraph, which breaks down the percentages of respondents who plan to sell and when, this report covers the responses from the 1,701 respondents who said they own a home.
