Millions of homeowners afraid to sellby Tim Manni
Ever since home prices and mortgage rates began falling, we’ve been saying that this is a buyer’s market. Despite the added lending restrictions on today’s borrowers, it still is a buyer’s market. Weak demand, low prices and already-bloated inventories of homes for sale will prevent it from becoming a seller’s market for some time to come.
According to Zillow.com’s Homeowner Confidence Survey, millions of borrowers are just itching to sell their homes, but are too afraid to because of market conditions:
Five percent of homeowners–or 3.8 million ‘sidelined sellers’—are anxiously waiting on the sidelines to sell their home in the next six months upon signs of a local real estate market turnaround.
Zillow’s quarterly Homeowner Confidence Survey also reported that from the end of 2009 until the second quarter of 2010, more homeowners became less-confident about home prices. In the fourth quarter of 2009, some 39 percent of homeowners were confident that home values would increase, compared to just 30 percent in the second quarter of this year.
I’d be willing to bet that there are millions more ’sidelined sellers’ — in addition to Zillow’s survey — out there who can’t sell (or don’t want to)because of lost or negative equity. While some of these trapped borrowers have simply decided to surrender their homes and walk away, for the majority who stay put, it’s going to be a long haul to regain equity.
To take a deeper look at the problem, we crunched some numbers to try to figure out how long a borrower’s underwater situation might persist before they could sell without triggering a loss; Click here to read “Home Equity: Why 2015 Is The New Zero.”
(hat tip: AOL Housing Watch)