Zillow research shows sellers overpricing homes

Seattle-based Zillow announced today that home sellers who purchased their home in 2007 or later are overpricing their homes by an average of 14.1 percent.

Meanwhile, sellers who originally purchased their homes before the run-up in home values and those who bought during the bubble also overprice their homes, but not by as much. Those who bought before 2002 price their homes about 11.6 percent over market value, and those who bought between 2002 and 2006 price their homes 9.3 percent above market value.

“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,” said Stan Humphries, Zillow’s chief economist.

Zillow compared the asking price of one million for-sale homes with those homes’ previous purchase price, then factored in the change in the Zillow Home Value Index at the ZIP code level to determine that home’s current market value.