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Home prices keep rising, but owners still not selling

May 24, 2017

It's no secret that home prices have been on a steady climb for years now, and one might suspect that this would be enough to entice current homeowners to put their properties up for sale. However, that's just not the case, and it's keeping the buying market incredibly restricted for shoppers who want to realize the American Dream. Moreover, it's a trend that's not likely to change any time soon.

"Sellers got a return on investment of 24%."

The average person who sold his or her home in the first quarter of the year got $44,000 more than they paid for it, a return on investment of 24 percent, according to the latest U.S. Home Sales Report from ATTOM Data Solutions. That's the largest average price gain seen since the market collapsed, edging ahead of the ROI sellers received in the third quarter of 2007.

Other stats for recent sellers
While that 24 percent ROI is significant, it's still only in line with the kinds of returns seen in 2002 and 2003, and well below the levels seen right before the housing bubble burst, the data showed. In the third quarter of 2005, the market set an all-time high for seller ROI, both in terms of cash (more than $70,000) and percentage (more than 50 percent).

The good news for the market as a whole, though, is experts don't think this is the start of another housing bubble, according to CBS News. There are many reasons sellers may not want to move out of their homes (including the fact that they likely locked in some of the lowest mortgage rates ever seen) but experts say the reason this probably won't lead to another bubble is there are so many people today who don't own homes yet. Currently, the homeownership rate nationwide is only beginning to rebound from 30-year lows, and the economic recovery is increasing purchasing power.

"Agents list a lack of available inventory as their biggest challenge."

Still challenging for buyers
Of course, those overarching positive trends aren't likely to provide much relief for buyers now flooding the market for the spring shopping season, according to the latest Realtors Confidence Index from the National Association of Realtors. Agents currently list a lack of available inventory as their biggest challenge in the market, and any homes that are put up for sale get snatched up quickly. In March alone, half of all listings sold in 34 days or fewer, down from 47 days or fewer in the same month last year.

Currently, 32 percent of all buyers are first-timers, so they may be on the lookout for even better deals, the report said. However, distressed properties - which tend to carry lower price tags - are increasingly rare in the market as well.

With all this in mind, it's vital for shoppers to have sizable down payments ready to go, so that if they find a property they want to buy, they will be able to withstand any bidding wars they may encounter.

 

 

 

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