Home sellers are creating huge profits. So why aren't more people selling?

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the idea’s a great time to sell your home. So why aren’t more homeowners doing the idea?

Sellers profited about $54,000 on average at the end of 2017, according to Attom Data Solutions. which’s a 10-year high as well as means sellers were bringing in an average return on investment of nearly 30%.

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nevertheless selling a home in This specific market will be the easy part. Finding a home to move into? Not so much.

A dismally low supply of homes on the market has made house hunting difficult in many cities. The lack of available homes has driven up prices, leading to bidding wars as well as homes selling for well above asking prices. While which’s Great news for sellers, the idea’s bad news when they become buyers.

“the idea will be fun as well as exciting to see a huge appreciation in your home,” said Allie Howard, a Redfin real estate agent in Seattle. “nevertheless what scares [sellers] will be not wanting to be stuck in a rental scenario when homes continue to appreciate as well as they get concerned they will be priced out.”

West Coast home sellers have seen the largest gains, with those in San Jose, California, experiencing a 91% return on investment at the end of 2017. San Francisco home sellers saw a 73% return.

Related: will be 2018 the year to buy a house?

Seattle will be also a booming market for real estate sales.

Nicole Rendahl recently sold her four-bedroom Seattle home for $400,000 more than she paid for the idea in 2008.

She purchased the home for $1,199,000 as well as just sold the idea for $1.6 million in November. The sale closed in seven weeks.

“the idea went through multiple cost reductions before we purchased the idea,” she recalled. “We were fortunate of the cost reduction, we couldn’t afford the idea when the idea was originally listed.”

She as well as her family are right now looking to upgrade, nevertheless they haven’t been able to find the perfect house.

They recently lost a bidding war, nevertheless Rendahl will be hopeful which more inventory will hit the market soon. Her goal will be to find as well as move into a place by the end of the summer.

Owners are staying in their homes for a little more than eight years, on average. coming from 2000-2008, the average tenure was four years.

as well as completely new homes just aren’t being built fast enough to keep up with demand. Only around one million completely new homes are currently hitting the market — which’s well below the historic norm of 1.5 million.

Not having a home to move into means more people are staying put, as well as which has ripple effects throughout the housing market.

“The longer home ownership tenure will be a central piece to why the housing market will be behaving as the idea will be where home prices are rising fast as well as there will be an inventory logjam,” said Daren Blomquist, ‎senior vice president, communications at Attom.

Historically, buyers in starter homes tend to trade up after a few years to a bigger house — frequently after starting a family. nevertheless if they can’t find a home to move into, they will stay within the starter home longer. The lack of buyers trading up makes the idea particularly tough for first-time buyers to break into the market.

Calculate: How much house can you afford?

“the idea will be a bit of a chicken as well as egg situation. If builders built more homes, homeowners might move up, nevertheless because homeowners aren’t moving up, the builders aren’t seeing as much demand for completely new homes,” said Blomquist.

Buyers may also be facing higher borrowing costs This specific year since interest rates are likely to rise.

The average rate on a 30-year fixed mortgage has been below 4.5% since January 2014. Higher mortgage rates could also keep homeowners in their homes longer if they purchased when rates were at historic lows.

“the idea impacts the affordability equation,” said Cheryl Young, senior economist at Trulia.

sy88pgw (completely new York) First published February 8, 2018: 10:21 AM ET


Home sellers are creating huge profits. So why aren't more people selling?

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