The days of having to elbow pathways into open houses are OVER. So are sight unseen offers and bids coming in at hundreds of thousands on top of asking prices, according to a recent article written by Prashant Gopal and Noal Buhayar for Bloomberg News.
For the first time in years buyers are holding the reins in this spring’s house hunting season. Prashant and Buhayar wrote, “Nowhere is this shift more pronounced than in once-hot areas such as Seattle, San Francisco and Denver where bidding wars are vanishing, time-on-the-market is climbing and prices are flattening and even falling.”
The simplest explanation for this turnaround, according to Buhayar and Gopal, is that years of escalating home values in many areas of the country have put housing out of reach to all but the most affluent buyers. Prices have more than doubled from the recession in many parts of the West and incomes simply have not come close to keeping pace.
According to Lawrence Yun, chief economist with the National Association of REALTORS® (NAR), “There’s a huge disparity. People can’t catch up.”
A key indicator that the housing market is now tilting towards buyers is year-to-year increases in inventory. Take a look…
- Denver +37%
- Los Angeles +17%
- Oakland +41%
- Portland +37%
- San Francisco +31%
- San Jose +82%
- Seattle +101%***
- US – +3%
NAR’s Yun said that buyers who have the means to buy have many new opportunities to enter the market and that sellers now face “a reality check.”
Home sales in both the San Francisco Bay Area and Southern California are going in the opposite direction of inventory. CoreLogic points to the 11-year lows in terms of sales in both markets. And home prices in Portland and Denver fell for the first time since 2012, according to multiple listings services.
In Seattle, current home prices are lower than last year, negotiations are welcome and builders are working with buyers to reduce agreed-upon asking prices as buyers have to reduce the price of the house they are trying to sell in order to buy the newly constructed house.