Investors are getting concerned because the longer it takes to sell a home, the more it costs them, said Steve Turner, owner of Scottsdale, Arizona-based Cayote Capital Investments, which charges 18 percent for six-month loans to buyers of investment properties.
His clients who purchase, repair and resell houses would be happy with moderate price growth as long as it is predictable, Turner said.
“Slow growth gives everybody a chance to figure out a longer-term strategy,” Turner said. “It’s the peaks and valleys that gives everybody angst.”
Demand Slowed
Stumpf, the Sacramento real estate agent who represents Imgarten, said demand slowed because institutional investors bid up prices and then pulled away. For traditional buyers, “affordability just got snapped” with the jump in mortgage rates, she said.
“Six months ago, if I listed a property under $400,000, I would expect multiple offers within a few days,” Stumpf said. “Now, I might get one offer within the first couple weeks.”
Imgarten resumed his house hunt this month, sensing that the market has cooled. He wants to avoid the frenzy, which drove him to bid $265,000 in June for a three-bedroom home listed for $253,000. As part of the offer, he agreed to bring extra cash to the table if the appraisal came in below the contract price.
“The bidding wars were creating a false market,” Imgarten said. “Now is a good time to jump back in and see where we’re at.”