Many Home Owners in Denial About Price
More home owners, particularly those who bought their homes in 2007 or later, are overpricing their properties when trying to sell them, according to a new analysis from Zillow. Home owners who purchased their home in 2007 or later are overpricing their homes by an average of 14 percent, according to Zillow.
While sellers who purchased their home prior to the housing bubble also overprice their homes, they don’t overprice by as much, the study finds. For example, home sellers who bought their home prior to 2002 are pricing their homes on average about 11.6 percent above market value; those who bought between 2002 and 2006 are pricing their homes 9.3 percent over market value.
"Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today," says Stan Humphries, Zillow’s chief economist. "But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”
In its analysis, Zillow compared the asking price of 1 million homes for sale to the home’s previous purchase price and factored in the home’s estimated current value.
Source: “Sellers Who Bought Post-Bubble Guilty of Overpricing Homes; More Likely to Base Asking Price on Original Price, Rather Than Current Market Conditions,” Zillow (July 14, 2011)
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