Just a few months ago, the real estate market was favorable for people selling their homes. The volume of buyers increased, the number of listings decreased, and interest rates appeared to be falling across the country.
Now brokers say the market has changed.
Justin Itzen, a broker who sells luxury homes in Orange County, Calif., told ABC News’ Nightline, “Today, week after week, more and more inventory is hitting the market and demand is falling.
“Buyers have more options and can be more selective,” he said.
In expensive coastal markets such as Orange County, homebuyer interest has dropped significantly and there are signs the market is cooling, said Taylor Marr, chief economist at real estate listings site Redfin.
Overall, the share of home listings that have been on the market for 30 days or more has increased by more than 12% since last year, according to a Redfin report released last week.
Buyers are more hesitant to take out a loan as inflation has pushed interest rates up from 2-3% last year to 5-6% this month on certain mortgages.
“We felt a very aggressive slowdown,” Itzen said, and it happened almost overnight. “During the open house, it was like, ‘Where are the buyers?'”
Iesha McTier-Whyte, a broker who sells mid- to high-end homes in the Newark, New Jersey area, told ABC News’ Nightline that she has had the same experience but doesn’t think it’s necessarily a bad thing. I said no.
“Good to see [the market] Keep calm and go back to basics,” she said. “What we experienced last year was like no other.”
Gio Helou, Real Estate Partner at Justin Itzen, said: [now] Instead of making tremendous sacrifices to secure a home, you can actually go through the natural home buying process.
Still, rising interest rates are putting some pressure on buyers.
A couple, Deni and Tim Sherman, started thinking about buying a home in California this spring and turned to Gio Helou for help. They found the process very stressful.
“The home was well above its asking price within days,” said Tim Sherman.
When they found a house they wanted to buy in Huntington Beach, California, they considered liquidating their investment to buy it.
Tim Sherman said he not only “exceeded the asking price by 15%” but also “exceeded market estimates of the property’s value.”
The house went bankrupt, but I was finally able to buy a house. Helou sent it to them and they immediately made an offer based solely on her photo.
They said their house in Dallas was sold in one day.