Today, the Washington Post has a story on the the mismatch in expectations between buyers and sellers, and how this may be contributing to the continued stagnancy in the housing market, even in places like DC where the war-serving regional economy has been pretty well-insultated from the crash, until recently:
Despite record-low interest rates, many would-be buyers are retrenching, hamstrung by meager growth in their wages, gripped by fears over the possibility of losing their jobs or another recession. Sales of existing homes plunged in July to the lowest level in more than a decade, and sales of new homes were slower than at any time since the government started tracking the data in 1963. The results were far worse than some of the most pessimistic economists had expected and added to the doubts nagging at Wright and other prospective buyers, even in areas such as Washington that have been relatively insulated from the housing bust.
Coupled with the desire that sellers have to recoup at least some of their losses–and realtors like the one featured in the story–who are still expecting everything in the District to be worth a million dollars or more, it’s a hard market to move anything. And with reason: buyers put money into their houses believing that it was an investment that would pay out for them.
At some point time should sort this out. Either it’s worth it to hold on to a property for however long it takes to get the right price, or it’s not; or it’s worth it to wait–or not. Eventually the market has to hit a point where transactions will clear.