How long do homeowners stick around before selling? The National Association of Realtors asked sellers who had just bought something new how long they owned their previous home. (March 8, 2012) |
It is a truth universally acknowledged (apologies to Jane Austen) that years of falling home prices have left a lot of folks stuck in place, unable or unwilling to sell. But here's a chart that really underscores how much that has affected shorter-term owners.
The figures, which come from a National Association of Realtors survey of U.S. sellers who then bought something else, are striking: 25 percent of people in the 2011 survey owned the place they sold for five years or less, compared with an average of more than 40 percent in 2003 through 2009. (Half fell into that category in '06.)
The survey suggests that people who manage to sell nowadays -- at least the ones who turn around and buy again -- are increasingly long-term.
Forty-two percent of people in the 2011 survey owned their previous home for more than 10 years, up from an average of 28 percent between 2003 and 2009.
In other words, the short- and long-termers have swapped places, in terms of who's a bigger share of the selling market. (The sellers who owned for six to 10 years account for more of the market now, but the change isn't so dramatic -- 33 percent vs. just under 30 percent.)
The trade group's survey doesn't follow calendar years, by the way. The 2011 crowd had to have bought their new place between July 2010 and June 2011.
U.S. home prices peaked in 2006 and have been falling pretty much ever since, so you can see why someone who bought in recent years would have trouble selling -- unless they put a lot of money down.
A homeowner who bought more than 10 years ago, on the other hand, is much more likely to have equity. The S&P/Case-Shiller index suggests national home prices are down to late 2002 levels.
Baltimore-area home prices have fallen about 22 percent since their peak, according to Moody's Analytics, compared with a national price decline of 30 percent. While the local drop is smaller (big markets such as Florida and California have really been hit hard since the bubble popped), a lot of locals have been affected.
More than 150,000 homeowners in the Baltimore region are either underwater on their mortgages or have so little equity that they couldn't break even by selling, counting transaction costs. That's one out of four mortgaged properties, according to real estate data firm CoreLogic.
Oh, one more nugget: The most common reasons sellers sold, according to the Realtors' 2011 survey, was to relocate for work or to get more space. Both topped the list at 17 percent each. Five years ago, getting more space accounted for 19 percent of moves, with job relocations at 9 percent.
