Do you feel that hint of a chill starting to swirl through the housing market? The cooling is slight but it’s for real. Home prices are not rising as fast in most metropolitan areas as they did earlier this year and much of 2012. Multiple bid competitions – fierce in many places this spring and late last year – aren’t as intense. Inventories of homes for sale have increased this summer, reversing near droughts of listings that helped fuel higher prices.
Add in rising mortgage rates, and you’ve got a distinct, measurable momentum shift in the pace of the housing recovery. The recovery is still well under way – it’s just not as effervescent as it once was.
Consider some of the key numbers:
• Asking prices on homes listed for sale declined by one-third of a percent in July, the first drop on a monthly basis since last November, according to data compiled by Trulia.com. Quarter-to-quarter data through July confirm the moderating trend line.
• Pending home sales – under contract but not yet closed – dropped by four-tenths of a percent in June, according to the National Association of Realtors. Resales of houses in June dipped by 1.2 percent.
• Inventories of homes listed for sale rose in a number of the hottest markets recently, after hovering near record lows for a year or more. Low inventories stoke buyer competition and bidding wars that can send prices up sharply. More plentiful inventories give buyers more to choose from and tend to calm things down. According to data compiled by realtor.com from multiple listing services around the country, inventories of homes listed for sale rose 7.8 percent during July in Los Angeles; 12.5 percent in San Diego; 8.3 percent in Seattle; 6.5 percent in Tampa-St. Petersburg and 4.5 percent in Boston. Trulia estimates that nationwide inventories of homes for sale are up 6 percent since January.
• Not as many potential buyers are out shopping, and it’s not just because it’s summer and everybody is at the beach. Redfin, the online real estate brokerage, measured a 3.5 percent drop in home showings by agents last month. That compares with a 3.1 percent monthly gain a year earlier. Not surprisingly, signed contract offers were down by 11 percent in July compared with June. Plus the number of multiple bid competitions is dropping in major markets – down by 5.3 percentage points from June to July alone. In San Diego, the monthly decline exceeded 10 percent. Redfin says it’s detecting signs of “buyer fatigue.”