Why Are Home Sales Slow? People Have Stopped Moving
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With the economic slowdown, people are staying closer to home. People are moving less than at anytime since 1962. Even immigration has slowed down.
The combination of job loss, lack of equity in their present property values, and just plain fear is stopping the market dead in their tracks.
“We are normally thought of as a country on the move, but now all levels of migration have almost come to standstill,” said William Frey, a demographer at the Brookings Institution, a Washington think tank. “People are just staying put.”
The national mover rate was 11.9% last year, meaning 11.9% of the people lived in a different dwelling than they did the year before. That was down from 13.2% in 2007. In total, about 35 million people moved last year, down from about 39 million in 2007.
With home values falling, many people have stayed in place, either because they can’t sell their homes or aren’t happy with prices offered.
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Comment by Portland Real Estate on 23 April 2009:
Interesting. My initial thought would be that the opposite was happening, as I have known a lot of people who left their homes for smaller ones, or for apartments in order to save money. Its really interesting to read that the actual trend is so far from what I anticipated.
Pingback by Daily Digest for 2009-04-23 | Joe Spake - Memphis Real Estate on 24 April 2009:
[...] Posted an item Joe Spake: Why Are Home Sales Slow? People Have Stopped Moving : The Real Estate Bloggers (via Frien… [...]
Comment by Kim | Web Design on 24 April 2009:
Portland Real Estate, I would have to agree with you on your comment, people are really downsizing and this is helping with saving, as well as that a smaller place is easier to maintain, in the long run.
Comment by randi on 24 April 2009:
yep, i have know many cases similar to these and they are very peculiar
Comment by Martin | Landlord Software on 24 April 2009:
In Oregon at least, I am seeing a lot of previous homeowners looking to rent. They aren’t moving far, because that’s too costly. Most of these, from the ones I’ve met were paying $1500/mo on their mortgage, give or take, and either their rate went up, or the value of their home went down and they ditched the mortgage in favor of renting the same size/quality of place for $1100/mo.
Comment by Atlanta homes on 25 April 2009:
This is very true. In the past the average person in Atlanta moved once every 3-5 years. I think this will now turn into 5-7 years and severely change the housing industry.
Comment by Joshua Pettus on 27 April 2009:
Our market here in North Alabama has been suprisingly healthy. Especially in the Huntsville area. The problem we face is that they can’t sell their house in another part of the country. Sellers are reluctant to rent, but sadly are left with no choice.
The issue that I see is that those who can actually buy are still convinced that this is not a good time to buy. There’s a great selection of houses here, and even though the market has picked up for the spring, there’s still a lot of hungry sellers out there willing to break a deal with folks.
A couple of weeks ago I wrote a blog entry about what consumers can do to save the economy… buy a house! There’s so much economic stimulation that can take place from a family buying a house.
Joshua
Comment by Vikas on 6 May 2009:
Due to current market situation peoples are feeling much insecure it effect their spending power. Now they are hesitating to take loans for property. It effects the real estate market.
Comment by Richard Grassby on 9 November 2009:
When everyone thought that residential real estate could only appreciate in value, no one hesitated to pay inflated prices and take on excess debt. Now they know that real estate can fall as well as rise in value, they are reluctant to invest even at greatly reduced prices because they fear that prices will sink even further.