Houses have been flying off the shelves for the past six months, but the sales pace is starting to slow, and could in fact decelerate more dramatically in some of the hottest markets come winter. Critically competitive markets like San Francisco, Denver, Seattle and Boston historically slow down the most in winter, and that could be welcome news for bidding-weary buyers.
While home sales are still strong in most major markets, houses sat on the market longer this summer, according to Trulia, which looked at the pace of sales from June to August. Sixty-three percent of the homes on the market in June still had the “for sale” sign up in August—a slight increase from last summer when just 61 percent were still listed.
This may be due to price fatigue. Real estate agents and homebuilders say they are starting to see more buyers balk at high prices and shy away from bidding wars.
“We definitely saw a bit of a cool toward the end of July. People started to get nervous about rising prices,” said Jill Schafer, an agent at Kentwood Real Estate in Denver.
Part of the slowdown was also due to agents simply overwhelmed by demand.
“I think that agents were so busy and swamped that we couldn’t keep it going. Everyone I talked to said, I’m holding people back,'” added Schafer.
The fastest moving housing markets are the ones with the biggest price jumps, mostly in California, according to Trulia. Seattle, Denver, Salt Lake City, Cambridge, Massachusetts (outside Boston), and Sarasota, Florida, round out the top 10. With colder, traditionally slower housing months approaching, Trulia researchers noted that many of the markets with the fastest moving sales today are actually the same markets that see the biggest change in sales pace historically from summer to winter; that is, they slow down the most.
“Homebuyers who were not able to close on the home of their dreams in the fastest moving markets this summer might have better luck come winter,” remarked Trulia housing economist Ralph McLaughlin in the report.
Topping the list: San Francisco. Just about a quarter of homes for sale in June were still up for grabs in August, but in winter that share historically increases by 19 percent. In Seattle, which doesn’t exactly see very harsh winters, 13 percent more homes will sit for at least two months. In Boston, 12 percent more, and the same for Charlotte, North Carolina, and Chicago.
“A lot of that depends on how bad the winter is. I hear they’re predicting a lot of snow for us, and that will slow us more,” said Schafer.
Where can buyers take their sweet time? Look to the middle: Detroit, Kansas City and Indianapolis see the slowest time for houses to sit on the market. Pittsburgh, New Orleans and Newark, New Jersey, also give buyers the advantage on timing.