A healthy and balanced housing market typically has about a 6 month inventory of homes for sale. However, in recent years, we have seen this inventory at extremely low levels. In fact for many markets across the country, the current inventory of homes for sale is around 3 months. Needless to say, this is approximately half of what it should be. Of course, this low inventory is helping keep home prices higher. Add in the fact that mortgage rates are at a 23-year high and the result is a stagnant market. So why are more people not selling homes? We discuss some of the most common reasons below.
Reasons for not selling homes
- They have a low mortgage rate. Mortgage rates have been rising in recent months, making it more expensive to buy a home. Homeowners who have a low mortgage rate may be reluctant to sell and have to pay a higher rate on a new home.
- They missed the recent peak of the previous market. In most regions, the peak of the housing market took place between April and June 2022. Of course, all of 2021 saw many homes selling in just days, if not hours. Oftentimes, these homes sold with bidding wars.
- They can’t afford to buy a new home. Even though home prices have been cooling in some areas, they are still high in many parts of the country. Homeowners who want to move may not be able to afford to buy a new home, especially if they have to sell their current home first.
- They fear higher insurance premiums. Particularly here in Florida, insurance premiums have skyrocketed. For homeowners thinking about a larger home, these higher premiums could provide headwinds.
- They love their home and neighborhood. Some homeowners simply love their home and neighborhood and don’t want to move. They may have put a lot of time and effort into fixing up their home and making it their own.
- They are waiting for the right time to sell. Some homeowners are waiting for the right time to sell, such as when their children are grown and out of the house or when they are ready to retire. They may also be waiting for the housing market to improve in their area.
- They don’t want to deal with the hassle of moving. Moving can be a lot of work and stress. Homeowners who are downsizing or moving to a new city may be reluctant to deal with the hassle of packing up their belongings and finding a new place to live.
- They prefer to age in place. For many older homeowners, aging in place has become more popular. Historically, many of these homeowners would downsize once they became “empty nesters” Nowadays, we are seeing more older Americans remain in their homes.
Selling homes in this market certainly requires patience and expert guidance from your real estate agent. With mortgage rates at 23-year highs and persistent inflationary pressures, there are significantly less buyers in the market right now. Of course, every market is different and a local and knowledgeable real estate agent will be your best resource for timely information.
Are you thinking about selling your property in the South Florida market? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download our free Florida Home Search app for your smartphone or tablet.