Sellers Continue to Lose High Ground

Reports from ""Redfin"":http://www.redfin.com/ agents indicate the fourth quarter was a rough one for homeowners looking to sell.

[IMAGE]

The tech-powered brokerage released its latest ""quarterly survey"":http://www.redfin.com/research/reports/real-time-market-sentiment/2014/just-65-percent-of-redfin-agents-say-now-is-a-good-time-to-sell-down-from-72-percent-in-the-third-quarter.html#.UscBK_RDte of agents in its 22 markets across the nation. The findings indicate a continued shift in market balance: The number of agents saying now is a good time to sell fell 7 percentage points to 65 percent--the third drop in as many quarters--while the number saying now is a good time to buy edged up slightly to 56 percent.

Asked about specific challenges, the majority of Redfin agents agreed that sellers are their own worst enemy right now. Sixty-three percent said the greatest problem sellers have is their unrealistic expectations about the value of their own homes, an uptick from 62 percent in Q3. The next biggest challenge was low inventory at 31 percent.

Tight inventory was also a major source of frustration for buyers last quarter, with 87 percent of agents listing that as a common challenge. Next was the problem of elevated competition, though that share was down 14 points to 65 percent, reflecting the decline in bidding wars over the second half of the year.

Facing these issues, 45 percent of Redfin agents said their buyers-to-be decided to put off their home search for the holidays. Those determined to stay in the game said they've had to make concessions on how much they're willing to pay and which features they want.

With mortgage rates expect to climb to 5 percent or higher this year, Redfin also asked agents how high interest rates would have to go before the housing market really starts to suffer. The majority--39 percent--said 5.5 percent is the magic number.

""If rates reach 5.5 percent, we'll start to lose entry-level buyers. The ripple effect will reach homes in almost every price point,"" said Redfin agent Jeff Bale, who operates in Portland.