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Home sellers must readjust their market expectations

Date posted:  6/3/14 07:45:00 AM Homes are sitting on the market for longer than they were just six months ago.

As a greater number of homes hit the market and improve inventory levels across the country, home sellers need to readjust their expectations, according to Nela Richardson, chief economist of the real estate brokerage firm Redfin.

"Sellers hoping for higher prices will face reality soon, as all signs point to lower price growth and less competition among buyers in coming months," Richardson said in a statement. "Buyer demand is there, but only at the right price."

According to Redfin's most recent Real-Time Seller Survey, fewer sellers believe now is a good time to sell. In the second quarter of 2014, 52.4 percent of sellers thought it was a good time to sell, while just 35.1 percent of sellers believe the third quarter is a good time to get rid of their home.

The Redfin's October survey was conducted using responses from 295 existing and potential sellers coming from 30 different markets across the nation.

A slow decline in housing prices
Greg Bender, a real estate agent with Berkshire Hathaway HomeServices, told USA Today homes are starting to sit on the market for a longer period of time than just six months ago. Bender believes buyers just don't have the same burning desire to get into the housing market as soon as possible.

Redfin agent Paul Stone said many homes listed on the market were never purchased because fewer buyers are willing to spend more than the market value. Thus, Redfin agents have noticed a drop in home prices on the market during the first half of the third quarter.

"In July and August, sellers were testing the market by pricing their homes above market value," Stone said in a statement. "They were hopeful, but many got the message too late that the market had already shifted. They had to adjust their expectations and their home prices."

A major change in trends in just 12 months
The housing market has changed drastically in just one year due to a few factors, according to USA Today. There are fewer investors buying properties, foreclosures rates have fallen to new lows since the start of the housing recovery and there are more homes for sale.

"At this time last year, we were worrying about a number of frothy markets that looked like they could be on the edge of another housing bubble, places where homes were appreciating at more than 20 percent per year and where buyers' heads were spinning just trying to keep up," Stan Humphries, chief economist at Zillow, told USA Today.