Sellers Look for Spring Thaw in Housing Market
RENEE MONTAGNE, Host:
MONTAGNE: It's great to be with you.
MONTAGNE: Now, we're entering a critical time for housing sales, right? I mean, this is - more or less we're going into the season.
MONTAGNE: And of course mortgages are increasingly hard to come by. So the real question out there is, you know, are we going to see prices drop, which will encourage buyers to step up to the plate and purchase, or are we going to continue with the standoff where sellers are reluctant to cut prices and buyers are reluctant to commit.
MONTAGNE: There's also an overflow of supply in a lot of parts of the country.
MONTAGNE: There's something like ten months of supply on the market. By contrast, if you go back to early 2005 near the peak of the market, the supply of homes is only equal to 3.6 months of sales. That is the biggest indicator of the amount of pain in the housing market today.
MONTAGNE: So it sounds like people will have to lower their asking price, but it's a really hard thing to do. Why is that?
MONTAGNE: But for a lot of folks it's psychological. They have a particular price in mind that they want to receive. Maybe it's the price they paid for their house, maybe it's the price they paid for their house plus the cost of all their home improvements, maybe it's the price that their neighbor got when they sold their home at the peak of the market in 2006. Whatever it is, they are fixed on this particular price and they're very reluctant to drop from that point.
MONTAGNE: So what do you say to somebody like that? How do you make that argument?
MONTAGNE: Now, if you're living in the home and you can cover all those costs, they don't seem so burdensome. But supposing you've got an adjustable rate mortgage that you can no longer afford, or suppose you've already moved to another house and your old home is sitting empty or maybe you have a vacation property that you bought as an investment, you don't have any tenant and it's sitting there bleeding money every month, for a lot of people in these sorts of situations they would be much better off cutting their asking price and getting their property sold rather than sitting there and bleeding money month after month.
MONTAGNE: Thanks for joining us.
MONTAGNE: My pleasure.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.