Some of Dee Dee Trosclair’s clients are getting antsy these days and asking why their homes aren’t selling like hotcakes. Home buyers, meanwhile, are getting more serious about making a move, said Trosclair, a Realtor for Keller Williams Realty in Dallas.

Subtle signs of a slow-down have surfaced in some housing markets across the country, as inventories of for-sale homes build up and some homes take longer to sell. The sale of high-end homes in particular has been stagnant in some markets. Rising interest rates are high on buyers’ minds, Realtors report, and some agents said they’re worried that a growing number of homeowners are financially overextended.

Trosclair said she worked with one first-time home buyer who saw the interest rate rise one-half percent during the time it took to negotiate the contract and lock in the rate on her mortgage.

“The slight adjustment almost placed her out of the market,” Trosclair said.

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Trosclair has seen homes staying on the market for longer periods of time in the Dallas area.

“This year it seems that more buyers are in the market, and it appears that the listing inventory is up significantly and that’s favorable for buyers, of course. Buyers appear to be ready to move now with the motivation of higher rates in the future.

“Sellers are expressing concern that there are many homes available in their neighborhoods, and they may have to take a loss if they purchased in the last three years. Five years ago inventory was lower and the market seemed very much in balance,” she said.

A buzz of home-building activity in the region is a likely contributor to the slowing sales of existing homes.

“Builder competition is catching many of the would-be existing-home buyers,” she said.

Cindy Ranney, broker at Prudential Snyder/Armstrong Realty in Bloomington, Ill., said the market in central Illinois “is slowing down a little bit,” a trend that began in the past few weeks as interest rates climbed.

“Home buyers are worried about the interest rates–obviously that changes their buying power. Sellers are worried that once they get their (homes) sold, will they be able to buy what they want?” she said.

Consumer confidence remains high nationally, and home prices and home sales remain at or near record-highs in many parts of the country, according to The Conference Board’s latest index and the National Association of Realtors’ counts of home sales last month.

Ranney said some buyers in the Bloomington-Normal market expect to negotiate lower home prices, but prices are trending up in the area and homes generally sell right around the asking price.

Bill Wright, owner of Buyer’s Agent Realty in Normal, Ill., said he has seen a growing number of home purchases in which lenders contribute 90 percent to 100 percent of the sale price, and that worries him. A lot of houses are over-financed, in his opinion.

“One thing over this horizon (is that owners) might have a hard time selling because it was appraised at a certain amount,” he said.

Prices have inched up in the region, and Wright said he has seen more ranch properties on the market. In past years, he said, “I couldn’t give a ranch away.” Home buyers seem interested in big houses with big yards, he said. Baby boomers are also playing a big role as they buy retirement homes in the area, Wright said.

Beverly Edgerton of BradyWeaver GMAC Real Estate in the neighboring community of Bloomington, Ill., said she has seen a growing number of homeowners lose their homes because of problems making the payments. Loans of 100 percent of the home value end up being too heavy for some homeowners to carry, she said.

“They just owe too much on their homes. They can’t make the payments,” she said.

“People are in a hurry to buy now,” because of the present environment of rising interest rates, she said. But buyers aren’t jumping for homes that appear to be artificially inflated in price and higher-priced homes tend to stay on the market a little longer.

Fran Vernon, a Realtor with Dilbeck Realtors GMAC Real Estate in La Cañada, Calif., also said she frequently sees 100 percent financing for home purchases. Home appraisals are becoming a big issue, particular in the condominium and townhouse market, she said, as appraised values don’t always live up to the purchase prices.

Homes in Vernon’s area continue to sell above asking price, though inventory is starting to stack up.

“How much of that is historical spring inventory (growth) and how much of that is because things aren’t selling remains to be seen,” she said.

Another telltale sign of a possible hiccup in the housing market is that some homes are taking longer to sell.

“Now we are also seeing things sit for days, a week to two weeks. To us, something that has not yet had offers for a week or two or three is perhaps an indicator that the market is starting to show signs of slowing,” she said.

Buyers are generally well informed about the home-buying process, Vernon said, but some are less informed about the terms of their loan and they may be entering the market with unrealistic expectations about home prices.

“Many times they come to us with a price that is not matching our market. They are having to expand their search area,” she noted.

Vernon also has seen more open houses and more traffic at open houses as agents work harder to sell those homes that aren’t selling quickly. Multimillion-dollar take longer to sell while affordable, entry-level homes are selling far faster than homes in other price ranges.

The big question on buyers’ minds is whether they should buy now or wait. And that, ultimately, is a decision that the buyer must make, Vernon said, “We don’t have a crystal ball–ours broke.”

***

Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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