High Selling Costs Are Encouraging Owners To Keep Homes Vacant

New data suggests that for many homeowners, the financial penalty of selling a property has grown so steep that it is often cheaper to leave a house sitting vacant for years than to put it on the market. This phenomenon, often referred to as an "exit tax," is driven by a combination of high commission fees, closing costs, and capital gains taxes that can collectively outweigh the maintenance and holding costs of an empty home.

In several major metropolitan areas, the upfront cost of offloading a property can equate to nearly a decade’s worth of property taxes and insurance. This creates a powerful disincentive for owners to sell, effectively locking up inventory that could otherwise go to eager buyers. As a result, the "lock-in effect" is no longer just about low mortgage rates; it is now reinforced by the sheer friction of transaction costs.

Market analysts are closely watching how this trend impacts urban housing shortages. If owners feel penalized for selling, the supply of available homes will remain perpetually low, keeping prices elevated even as demand fluctuates. Industry experts suggest that unless transaction costs are lowered or tax laws are adjusted, thousands of habitable homes may continue to sit unused while the national housing crisis persists.

This analysis was originally reported by Realtor.com.