Fear among home buyers – even bargain hunters – that prices will continue to fall is holding the housing market in check, according to the latest survey from HouseHunt.com.
Although lower prices encourage bargain hunters to look for deals, they can also scare off buyers. And between the two, anxiety appears to be winning, said Mike Bearden, president of the web-based firm which provides free information and services to homeowners, home buyers and home sellers nationally through its member-agents.
"I don't yet see the light at the end of the tunnel," Bearden said. "Prices are still declining in most areas despite incredibly low prices and interest rates. Many sales these days are all cash investor sales."
According to the agents polled by HouseHunt, the second quarter of 2011 was mostly the same as the first quarter, with numbers steady but down from more prosperous times.
Nearly two-thirds of respondents said prices were down, compared to 56% in the first quarter. Also, 19% said appreciation was below 5%, compared to 21% in the first quarter, and 7% reported prices were up 5-10%, compared to 9% three months earlier.
While there are hot spots – Denver, for example – sellers continue to outnumber buyers overall, according to the survey. But when it comes to asking price, only slightly more than half said they're writing contracts for at least 95% of their target price. The other 45% are getting offers for less than what their clients are seeking.
Also, 84% reported that the average time a house spent on the market was in excess of 60 days, with some saying it was close to four months.
According to Bearden, banks must start lending to would-be buyers for housing prices to stabilize and begin to increase. "The banks are waiting for a better economy and stronger employment, but those cannot be achieved without housing participating in the recovery," the HouseHunt CEO said. "We will see how the rest of 2011 plays out; then we may have a clearer picture as to when housing will recover.
Meanwhile on Friday morning the government released June employment numbers showing that the economy added just 18,000 jobs in June -- the fewest in nine months and well short of the 80,000 expected. The unemployment rate inched up slightly to 9.2%.
