Hat tip to DJ3 and JP for sending in this article by Nick on the slowing market – an excerpt:
Buyers “want to lock something in before the rate gets away from them,” said Brett Dickinson, a real-estate agent with Sotheby’s International Realty in San Diego.
To be sure, there is often a slowdown in real-estate sales between the summer and fall, as school starts up and families look to stay put. And some real-estate agents welcome a slowdown because it eases their fears that prices were rising too fast.
“The market is having a bit of a hangover. We partied pretty hard, and you can’t go on partying like that all the time,” said Greg Markov, a real-estate agent with HomeSmart International in Phoenix.
Some agents say the biggest problem in the market is “seller greed”—that is, sellers pricing their homes too high, said Jim Klinge, a real-estate agent in Carlsbad, Calif. Faced with rising rates, buyers aren’t going for higher prices. “They don’t realize our 12- to 18-month full-tilt boogie is over,” he said.
While higher rates and prices are knocking marginal buyers out of the market, others, like Ghalib and Nancy Wahidi, will remain in the market but look for a less expensive house. The Wahidis’ original price range topped out at $1.2 million, but they reduced it after rates went up, said Dr. Wahidi, a 38-year-old physician. They are set to close this week on a four-bedroom $1.03 million home in Ladera Ranch, Calif., around 4% below its original list price.
Sarah Withers and her husband accelerated their decision to buy a home in August after rates increased. She said they are willing to pay $1,000 to get out of their apartment lease, which runs through next April. Last week, they signed a contract to buy a three-bedroom townhouse for $115,000. After the house sat on the market for a month, the sellers reduced the price, drawing four offers.
“We don’t believe that the recent increases in mortgage rate are going to in any way, shape or form snuff out the housing recovery,” said Timothy Sloan, chief financial officer at Wells Fargo & Co., at an investor conference last week. It wasn’t logical, he added, to expect double-digit price gains to last forever.