The Volokh Conspiracy - More Homeowners Who Know Their House is Worth More than Buyers Want to Pay:

Daytona Beach News-Journal:

Local residents Arline and Richard Pendl have been trying to sell their home in Sunrise Oaks for nearly a year. But no serious takers have surfaced for the four-bedroom, 2,600-square-foot home with a double garage.... So while they wait, the Pendls have dug in their heels and dropped their asking price to $369,000. They dropped it twice before, she said. 'My husband and I agree that we are not going to give this house away,' she said.

The Pendls paid $322,500 for the house in June 2005, very close to the peak of the bubble. In 2002, the previous owner paid $205,000 for the house. Apparently, "not giving the house away" means asking for 15% more than it sold for at the top of a bubble market, and 80% more than it sold for 6 years ago. It shouldn't be a great surprise that "no serious takers have surfaced," should it?

On a related note, I've seen several stories about townhouse owners who want to move to a larger, single-family, home, but want to wait until the market recovers so they don't take a loss. The stories suggest that these homeowners could take a loss and still be okay financially, they just don't want to. This is puzzling, because "move-up" sellers are obviously better off selling when prices are down than waiting for a recovery. For example, if owners paid 300K for a townhouse, and prices have dropped 10%, they should also be able to get what was a 600K SFH for $540,000, thus saving 30K. If they wait until prices rise 30%, they will get 81K more for their townhouse, but pay $162K more for the house they move to.

	[David Bernstein, January 27, 2008 at 4:45pm] Trackbacks More Homeowners Who Know Their House is Worth More than Buyers Want to Pay: Daytona Beach News-Journal: Local residents Arline and Richard Pendl have been trying to sell their home in Sunrise Oaks for nearly a year. But no serious takers have surfaced for the four-bedroom, 2,600-square-foot home with a double garage.... So while they wait, the Pendls have dug in their heels and dropped their asking price to $369,000. They dropped it twice before, she said. 'My husband and I agree that we are not going to give this house away,' she said. The Pendls paid $322,500 for the house in June 2005, very close to the peak of the bubble. In 2002, the previous owner paid $205,000 for the house. Apparently, "not giving the house away" means asking for 15% more than it sold for at the top of a bubble market, and 80% more than it sold for 6 years ago. It shouldn't be a great surprise that "no serious takers have surfaced," should it? On a related note, I've seen several stories about townhouse owners who want to move to a larger, single-family, home, but want to wait until the market recovers so they don't take a loss. The stories suggest that these homeowners could take a loss and still be okay financially, they just don't want to. This is puzzling, because "move-up" sellers are obviously better off selling when prices are down than waiting for a recovery. For example, if owners paid 300K for a townhouse, and prices have dropped 10%, they should also be able to get what was a 600K SFH for $540,000, thus saving 30K. If they wait until prices rise 30%, they will get 81K more for their townhouse, but pay $162K more for the house they move to.