Monday, October 30, 2006

A Cautionary To Sellers: "Pride goeth before a fall"

Since the housing market topped out in Massachusetts in 2005, there’s been a stalemate between buyers and sellers, the result being inventories as well as time on market doubled in some areas. Buyers are confident they’re in control and sellers are still optimistic hoping to get their price, because their house is different, special and better than the one for sale down the street. By some estimates, one third of sellers in our market are not serious about pricing their properties to sell.

The market is stuck with buyers saying they’re not going to pay too much for that house, and sellers optimistic and insistent upon getting their price. According to Mark Zandi, chief economist for Moody’s, “It could take a "Roto-Rooter" to finally flush stubborn sellers-and their market-clogging inventory-from real-estate listings.” Zandi concedes that the market could temporally stabilize as housing starts slow down and sellers remove their properties from the market during the winter with the idea of reintroducing them as fresh and new at a later date. "But it could very well be a dead-cat bounce," says Zandi, because if inflation pushes up mortgage rates, "it'll come right out of housing prices again."


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