By Prashant Gopal | Bloomberg Businessweek
Mike Imgarten, a 29-year-old civil engineer, encountered a frenzy of demand and a dearth of inventory during a two-month house hunt this spring in Sacramento, Calif. Fearing he’d end up paying too much, he took a break from the search in June. Sales in Sacramento now are off by more than 25 percent from a year ago. While inventory remains tight by historical standards, the supply of homes on the market has almost doubled, says Erin Stumpf, Imgarten’s real estate agent. “Six months ago, if I listed a property under $400,000, I would expect multiple offers within a few days,” she says. “Now, I might get one offer within the first couple weeks.”
In California, Arizona, and Nevada, where bidding wars have caused the country’s largest gains in home prices, markets are showing signs of cooling. The surge in prices, combined with higher mortgage rates, is reducing affordability while encouraging more sellers to list properties. “We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions,” says Ellen Haberle, an economist for Redfin, a real estate brokerage based in Seattle.
Related: Arizona adds 14,000 jobs in October, but losses seen in construction, manufacturing
