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Recovery Could Bring a Flood of Listings

If the real estate market were to show real signs of coming back to life, would you put your home up for sale? Plenty of people say they would.

According to a new survey released by the Zillow real estate Web site, about 32 percent of homeowners surveyed said they would be at least somewhat likely to do so. And Zillow officials said if there really is that much pent-up supply out there, it could seriously weigh down an eventual housing recovery.

Harris Interactive conducted the online survey for Zillow earlier this month. They surveyed 2,123 adults, including 1,357 homeowners. The respondents were asked whether they would put their house on the market if they see signs of a real estate market turnaround in the next 12 months. Twelve percent said they would be "very likely" to do so. Another 8 percent said they would be "likely," and 12 percent said they would be "somewhat likely."

Stan Humphries, vice president of data and analytics for Zillow, estimated that, extrapolating from just the "very likelies" and "likelies," about 20 million homes could be added to the for-sale inventory. Some of those sellers, he noted, would also be buying a replacement home. That would clear out inventory as well as add to it, but he said the effect still could be a drawn-out recovery as sellers jump on any improvement as an opportunity to finally get rid of their homes. "When there's clear improvement, the market could get temporarily flooded with inventory," he said. "It could result in a recovery where you could have lots of fits and starts as things improve moderately."

One amusing point from Zillow's study: We must be living in Lake Wobegon, where all of the children are above average. Thirty-seven percent of those surveyed said they expect values in their local housing market to decrease over the next six months. But only 26 percent thought their own home's value would decrease.

The (Can't Wait For The) Weekend Poll

By Elizabeth Razzi  |  May 14, 2009; 6:00 AM ET
Categories:  Selling , Statistics , The economy , The market , Weekend Poll  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Beware Dated Housing Stats
Next: Foghorn Leghorn in the Yard; Weekend Reading


--The Elephant in the room, is simply that HOUSING IS STILL COMPLETELY OVER-VALUED and unaffordable for most Americans, especially with wages going down, and jobs being vaporized!!

No matter how many TRILLIONS we throw at the problem, housing prices will fall to be back into line with historical fundamentals relating to wages and rents.

A house should be valued at NO MORE than 3X the average salary for an area... - is a great refresher on how FUBAR our housing situation is!

Don't kick yourself later by being suckered into buying a house during what will prove to be a false bottom!!

Posted by: misssymoto | May 14, 2009 2:26 PM | Report abuse

John McClain,
Deputy Director of the
Center for Regional Analysis at George Mason University, emailed me these comments: As is usually the case, there is only anecdotal data/reasoning information about such a situation. While there may be a shadow inventory, I suspect there are also a lot of sideliners renting and waiting for the bottom – if they think the bottom is imminent, they will move from the sidelines. Which group will overtake which?

Posted by: Erazzi | May 15, 2009 12:30 PM | Report abuse

Missymoto, get your facts straight -- it should be three times the average HOUSEHOLD INCOME, not three times average salary. Plus, that's a pretty superficial measure as it doesn't account for household debt or expenses. Furthermore, while talking averages is convenient, it doesn't exactly tell the whole story -- houses aren't all the same shape, size, quality or, more importantly, location. The "average" price of a city house in a neighborhood near Metro is rightfully significantly more expensive than one in an exurb. What is traditionally recommended is that folks don't purchase homes more than 3X their household income -- that doesn't necessarily mean that the average home should cost that (and again, what is average? Is that homes in the city or homes 30 miles from the city?). You could buy a reasonably decent three bedroom townhouse in Prince William county right now for $80K -- that's clearly less than 3X the average salary in the area -- but you can't get a 1BR condo in the city for even close to that. "Averages" for housing are a convenient but not terribly useful measure.

Posted by: GloverParker | May 15, 2009 6:11 PM | Report abuse

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