The Market Is Hot — So Why Aren’t More Sellers Listing Their Homes?

With home shoppers turning out in droves, even during a pandemic, you might wonder why more homeowners aren’t listing their homes for sale.

Only 1% of homeowners are currently selling, according to a recent Zillow survey. The rest are sitting on the sidelines at a time when there’s a severe shortage of homes for sale — and a slew of buyers looking to buy one.

The most common reason cited among all homeowners for staying put: They don’t want to become a buyer once they sell. More than a fourth of homeowners (26%) in the survey say they’re concerned about not being able to find or afford a home once theirs is sold.

Zillow research shows that 63% of sellers also are buying a home. The current market is extremely competitive for buyers, with homes going under contract in a record-low 12 days.

In addition to concerns about where they might live after selling, homeowners cite general life uncertainty (22%) and expectations that waiting will bring a more favorable sales price (21%) as reasons to stay in their homes.

Those hoping to sell sooner cite greater financial, health concerns

For homeowners who see a sale on the horizon — those considering selling within the next three years — the anticipation of a better sales price if they wait is the biggest factor holding them back, cited by 39% of would-be sellers.

Uncertainty also plays a role in their decision to sit out the hot market: 34% say their life and/or that of their household is too uncertain. Concerns about finding or affording a new home once they sell, precarious or uncertain finances and plans for or completion of a home renovation are each cited by 31% of homeowners who are thinking of selling within three years.

Health concerns related to the coronavirus are also a greater concern to would-be sellers, with 25% saying it’s a reason they’re not selling, compared to 15% of all homeowners.

With mortgage interest rates at historic lows, it’s not surprising that 15% of homeowners report a recent refinance as a reason for not listing their homes. While 54% percent say they will use the money they saved by refinancing to pay off debt and 50% say they would put the savings toward retirement, half say they would put that extra money toward home improvements.

Check out the full survey results on Zillow Research.

* “Homeowners” refers to household decision-makers who own their primary residence and have not moved in the past year.