Tuesday, July 19, 2011
Zillow: Post-Bubble Homebuyers Guilty of Overpricing Homes
Those who purchased their homes post-housing bubble are guilty of overpricing their homes, according to a new survey from Zillow.
The company noted that current home sellers who purchased their homes in 2007 or later are overpricing their properties by an average of 14.1 percent.
Conversely, those who purchased pre-bubble, from 2002-2006, have only priced their homes 9.3 percent above current market value.
Meanwhile, those who purchased before 2002 have listed their homes by an average of 11.6 percent above market value.
“Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today,” said Zillow Chief Economist Dr. Stan Humphries,” in a release.
“But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”
Humphries added that listing homes above the current market value causes them to stagnate, leading to a more bloated inventory, which further drives homes prices down.
The takeaway is that home prices remain very fragile, and haven’t done much more than fall or move sideways since the crash.
Even those who didn’t see their home price drift lower probably don’t have the required home equity to sell, factoring in agent commissions.
I guess this all begs the question, when is it going to be the right time to buy?