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Buyers and Sellers Clash on Home Prices

By Mike Wheatley | January 3, 2012

Home prices are expected to slowly stabilize in the new year, according to the experts at any rate, but this is unlikely to affect the different in opinion between buyers and sellers, who will most likely continue to be at odds with each other over property values in 2012.

Home buyer sentiment

For buyers the feeling is good, but for sellers...

While buyers have every reason to feel optimistic about housing in 2012 (after all, now is a great time to buy), the sentiment of sellers has fallen to a record low, according to a new report in Housing Wire.

The Mortgage Bankers Association apparently believes that home sellers are unhappy, as they are unable to get the kind of price they would like for their properties.

According to the MBA, a significant gap is growing between the estimations of buyers and sellers that is unlikely to narrow for some time.

From 1992 until 2005, seller sentiment hovered fairly high at between 40% and 60%, reports Housing Wire. However, seller sentiment crashed along with the rest of real estate, falling to just 7.6% by the end of 2005. On the other hand, buyer sentiment has stayed at a high level in spite of the poor economy and high unemployment levels. Even now, almost 80% of US households believe now is a good time to buy property.

With home values dropping in recent years, the majority of sellers are unwilling to budge on their own home’s valuation to reflect the current market price. The reason? Because numerous sellers are underwater on their mortgages. Almost 20% of mortgage holders across the US are thought to be underwater, owing more to their lenders than the value of their home. In addition, many sellers are beginning to realize that there are benefits to be had in holding out for a better price, writes Gary Engelhardt, an economics professor who authored the MBA report.

Engelhardt predicted that these factors could hold prices high enough to create a big gap between seller’s and buyer’s sentiments, which could be further exacerbated by the continuing low level of unemployment.

Image © Still Representation –

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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