The real estate frenzies in West Coast cities have become the stuff of lore: buyers jostling at open houses, homes getting offers sight unseen, bids coming in hundreds of thousands of dollars over asking.
That’s all over now.
Just ask Kelly Randall, an Amazon employee who listed her renovated Seattle condo for $539,000 -- a bargain compared with the $615,000 her friend got last year for a smaller place in the same building. Almost four months and four price cuts later, Randall’s still waiting for an offer.
“My timing sucks,” she said. “It’s a little frustrating.”
For the first time in years, the U.S. is entering its key spring house-hunting season with buyers holding the upper hand. Nowhere is the shift more pronounced than in once-hot areas such as Seattle, San Francisco and Denver, where bidding wars are vanishing, time-on-market is climbing and prices are flattening, or even falling. These western cities, the center of the recent housing boom, are now leading the slowdown.
The reasons are varied, from last year’s spike in mortgage rates to volatility in technology stocks. But the simplest explanation is that years of soaring values have put housing in many areas out of reach to all but the most affluent buyers. In many parts of the West, home prices have more than doubled from the recession while incomes have climbed far less.
“There’s a huge disparity,” said Lawrence Yun, chief economist of the National Association of Realtors. “People can’t catch up.”
With prices slipping and more inventory coming up for the busiest time for home selling, buyers who have the means will have a new opportunity to enter the market. Sellers, meanwhile, face a “reality check,” Yun said.
“This is what it looks like when the pendulum starts to go the other way,” said Felipe Chacon, a housing economist at Trulia.
Seattle Slowdown