The biggest barrier to a more robust spring housing market is simply a lack of listings, and there may be even fewer than we think, at least fewer homes people want to buy.
Nearly three-quarters of the homes on the market are “stale,” which is to say that they have sat on the market for more than a month with little to no interest from buyers, according to a new report from Redfin.
The number of homes for sale rose 2 percent in March from a year ago, according to a report from the National Association of Realtors released Wednesday. That, however, includes both new listings and homes that have languished on the market for months. With demand and sales increasing, there is just a 4.6-month supply of listings; a six-month supply is considered to be a healthy market balance between buyers and sellers.
There is something else at play as well: information. With so many websites and apps pushing moment-to-moment market movement, today’s buyers are increasingly data driven. Especially after the epic housing crash that gave birth to all this data, buyer psychology and suspicion are in full swing.
“The trust is broken among buyers. In Denver and Silicon Valley, if the house has been on the market for two weeks, there is something wrong with it,” noted Nela Richardson, Redfin’s chief economist. “Everyone is afraid to overpay, and the herd behavior in the stock market is something we’re now seeing in the housing market.”