Molly Grace8-minute read
UPDATED: November 08, 2022
Home sellers are in a pretty good spot right now.
In their frenzy to outbid each other on the current market’s low inventory, home buyers are pulling out all the stops to get into their next home. This ranges from paying well over asking price, offering a high down payment, paying closing costs, forgoing a home inspection, sweetening the deal with things like cryptocurrency or even offers to purchase the seller’s next house for them.
Thanks to the COVID-19 housing boom and the high demand and low interest rates that helped drive it, home values have risen at breakneck speeds in the past year. According to Rocket Homes℠ data, from Q2 of 2020 to Q2 of 2021, the median sales price rose from $270,004to $324,703 – meaning that in a single year, homes appreciated at a rate just over 20%.
All this puts current homeowners at a huge advantage, and they know it. But even though many homeowners acknowledge that the market is currently stacked solidly in their favor, most aren’t interested in selling.
To understand homeowners’ knowledge of current housing market conditions and what their thoughts on selling are, Rocket Homes surveyed 2,058 homeowners from across the country. Here’s what they’re saying about the prospect of selling their home.
Ever since the housing market began its swift upward climb, it’s been hard to miss the nonstop commentary on rising home values, bidding wars, and homes getting snatched up mere hours after hitting the market. Homeowners have taken note of this talk, and generally seem to understand just how much they stand to gain from entering the market as a seller.
When asked whether they think their home would sell for, below or above asking price if they were to sell in the current market (or, for those who recently sold their home, whether their previous home sold for, below or above asking price), 56.9% of homeowners surveyed by Rocket Homes said they believe their home would sell above asking. 36.9% believed their home would sell for asking price, and only 5.3% believed it would sell below asking.
They also think their home would sell fairly quickly, and garner at least a couple offers.
A total of 43.4% of homeowners believe their home would sell (or reported that their home did sell, for those who recently sold their homes) in less than 14 days. Most homeowners also believe they’d receive at least a couple offers on their home if they were to sell.
65.3% of homeowners believe they’d receive 2 – 5 offers if they were to sell in the current market; 19.8% believe they’d receive between 6 – 10. Very few said they’d receive fewer than 2 offers.
But in spite of knowing what they do about this advantageous market, only 35.1% of homeowners have thought about selling in the past year. The majority (63.4%) said they haven’t thought about selling, with only 1.5% saying they recently sold their home.
While many people believe the market is the main factor causing homeowners to hold back from selling their homes, 48.4% of homeowners don’t want to sell because they truly like their current home.
When asked to rank their top 3 reasons why they wouldn’t want to sell their home, 28.5% of those who haven’t considered selling in the past year ranked “my home is ideal for my current stage of life” as their top reason. 19.9% chose “my home is well located” for the top spot and 13.2% picked “I don’t want to have to buy a new home in this competitive market.”
These sentiments were also found in the analysis of homeowners’ responses to the open-ended prompt “explain why you would or would not want to sell your home right now.” Many respondents listed multiple reasons why they wouldn’t want to sell, including liking their current home, not feeling ready or wanting to take more time to enjoy all the upgrades and investments they’ve made.
In these written responses, 43% of homeowners who said they haven’t considered selling in the past year mentioned their love for their home as a reason why they wouldn’t want to sell.
One respondent mentioned their home’s beautiful views, ideal location and the families of deer that frequently roam the property as a reason why they wouldn’t want to sell.
“You would ask to buy it if you walked in,” they said.
Others mentioned their attachment to their current neighborhood, their home’s proximity to work, amenities or family, or the fact that the home perfectly suits all their needs as reasons why they like their current location.
38.9% of these responses also mentioned that they simply don’t want to move or just aren’t planning to, often because they don’t want to have to go through the hassle of moving or because they just don’t see the need. 14.8% mentioned that they felt it was too soon to consider selling, often because they wanted to wait to build more equity in their home, pay off more of their mortgage or because they felt the home wouldn’t be market ready until they made some repairs or improvements.
In addition to feeling satisfied with their current home, “I don’t want to have to buy a new home in this competitive market” was a top response for why homeowners haven’t thought about selling their home.
In their open-ended responses, some homeowners (including those who have or have not thought about selling in the past year and those who have recently sold) mentioned their dissatisfaction with the current market as a reason why they might not want to sell. 13.3% of all responses pointed to the current market being too expensive or too hot.
This seems counterintuitive, right? After all, the market is great for sellers at the moment. Remember, though, that many sellers also end up being home buyers in that same market. That can make this unprecedented seller’s market a bit of a double-edged sword for homeowners.
One respondent likened this situation to a catch-22. Another said they would and would not want to sell for the same reason: prices are high. Others mentioned that it would be difficult for them to find a new home that they liked and could afford in the current market.
With such a competitive market, is it possible for homeowners to have the best of both worlds when entering as both a seller and a buyer? Absolutely, says Rocket Homes REALTOR® Jason Strat. Sellers just need to give themselves enough time to find a new home.
Strat advises that homeowners use their leverage as the seller to negotiate occupancy, meaning they stay in their old home for a certain amount of time after closing, paying rent to the new owner and giving themselves the flexibility to find a home that suits their needs and their budget.
“My suggestion would be to either work out financing so that they could purchase prior to listing their home or ask for occupancy that would allow them time to find the next home and move through the financing period with enough time for their move,” he said.
Some homeowners, Strat said, may even be able to use this current market as an opportunity to upgrade.
“Homes in the lower and middle price points are potentially selling quicker than the higher priced homes, partly because home values have gone up as much as they have in recent years,” he said. “This could give an opportunity for a seller to move up in home size and take advantage of the low interest rates and purchase more then they may have been able to in the past.”
Even though a hot seller’s market can be challenging for buyers, there are a lot of gains to be made as a seller in the current market, and many homeowners realize that.
When asked to rank the top 3 factors that motivated them to consider selling their home, 24.9% of those who stated they have considered selling or recently sold their home listed “the hot, seller’s market” as their number 1 reason why they were interested in selling. “The desire to relocate” was another popular choice for the number 1 spot, with 22.1% picking it as their top choice. 10.1% listed “the desire for a more updated home” as their top factor.
These sentiments are reflected in this group’s open-ended responses. A similar margin (25.2%) of responses from the “have considered selling” group made note of the favorable seller’s market as a reason why they’d be interested in selling. One respondent specifically mentioned how much they could gain if they were to sell.
“I have two neighbors that have recently sold their houses in less than a week for almost $400,000,” they said. “That is double what we paid and they have less square footage. So it is very tempting.”
However, some of these potential sellers are also worried about the market conditions they’d encounter on the other end of the transaction – 18.3% of responses from this group mentioned the current market as something they’re worried about as a potential buyer.
To alleviate some of these concerns, Strat again advises sellers to give themselves time to find a new home without feeling rushed. Since everything has been moving so fast in this market, sellers may find it helpful to have a few contingency plans for where they’ll live while they search for a new home – like temporarily moving in with a family member or renting an apartment – if they can’t or don’t want to negotiate an occupancy agreement with their home’s buyer. This can give them the time and space they need to find what they’re looking for, he reiterates.
When it comes to the future of the market, Beth Kirton, a Rocket Homes REALTOR®, has some reassuring news for homeowners who are waiting for things to cool down a bit.
“Housing markets are cyclical,” she said. “As we have seen the market increase exponentially, we will also see that change, and the slowdown could be dramatic. Interest rates will change and so will the price a buyer can afford.”
Strat sees tight inventory as a hurdle for right now, as potential sellers may be discouraged from listing their homes because they’re reluctant to then have to compete over other available homes. When these would-be sellers choose not to list, the market gets that much tighter.
“Personally, I would love to see the market balance out a little more so that we have a relatively even inventory of properties moving and it benefits both the buyer and the seller,” Strat said of his hopes for the future of the housing market.
The U.S. housing market isn’t a monolith – conditions and prices can vary quite a bit from one area of the country to another, or even one neighborhood to another. Those who are relocating from a hotter, more expensive market to one that’s slightly more balanced, or homeowners who are looking to downsize, are potentially at a significant advantage in the current climate. And with mortgage interest rates near historic lows, buyers – especially first-time home buyers – can still benefit from buying right now, even in a seller’s market.
It’s also important to remember that, although market factors play a part in their decision to sell or not to sell, the biggest reason homeowners reported not wanting to sell is because they like their current home, which speaks to the value of taking the time to find a place that they like and that satisfies their needs.
To get homeowners’ thoughts on selling and learn what their understanding of the current housing market is, Rocket Homes surveyed 2,058 American homeowners aged 30 and older from across the country and from all different types of living environments (including rural, suburban and urban). Gender was capped at 60% to ensure that no gender was overrepresented. The survey was conducted online between July 26 – August 5.
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Selling a house can be exciting, but there is a lot to remember during the process. Check out our step-by-step guide and learn how to sell your house.