People who bought their homes after the housing bubble burst are more likely to have an unrealistic view of their home’s worth than those who bought before the housing downturn, according to a report released by Zillow this week.
The analysis found that people currently selling their homes who bought in 2007 or later are overpricing them by 14%. In contrast, those who bought before 2002 are overpricing by 12% and those who bought between 2002 and 2006 are overpricing by 9%.
“Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today,” said Stan Humphries, chief economist for Zillow. “But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”
Of homeowners who said they intend to sell their home in the next four years, people who purchased their home after the bubble were also more likely than those who bought earlier to base their asking price on the price they originally paid for the home, according to Zillow.
No one likes to admit their home has gone down in value — especially when it hasn’t been that long since you moved in. But if you need to sell that home after living in it for just a few years, take a deep breath and price it right, otherwise it could end up costing you even more.
“Overpricing homes causes them to stagnate on the market and keeps inventory from decreasing — not a desirable outcome for either the sellers or the market as a whole,” Humphries said.