Editor’s note: In this four-part series, we observe some of the latest changes taking place in housing markets – some subtle and some rapid. Read Part 2: Housing inventory grows in some major markets; Part 3: The end of multiple offers and Part 4: 10 signs of a changing housing market.
The living room, with its shiny hardwood floor, lemon-yellow walls and brand-new beige couches, was a masterpiece of home staging. The kitchen sported a vintage ’40s sink with a swan-neck faucet. The back yard was exquisitely landscaped. But on Sunday afternoon at the Oct. 2 open house, not a buyer was to be seen.
Visitors cruised through the two-bedroom, one-and-a-quarter-bath Northern California home offered for $479,000, but “not as many as there would have been six months ago, or even three months ago,” said Maggie Resnick, the Prudential California Realtor overseeing the open house. “The market has changed, and it changed quickly.”
The scene seemed to echo news that consumers’ home-buying plans fell to a 10-year low in September, according to the University of Michigan’s Survey of Consumers. According to that survey, reported the last week of September, the decline in home-buying plans was due to an increasingly negative reaction to high home prices.
Out of 11 people who cruised through the house in Richmond, Calif., three couples were neighbors checking out the house and three were selling their own homes and looking for marketing ideas and comparing prices. The lone remaining visitors, a couple currently renting in Richmond, were the only potential buyers – and they said they were “not interested” in the house.
“There’s a glut of properties on the market,” said Jackie Malic, who lives in San Pablo, the town immediately north of Richmond. “There’s a lot of inventory now, a lot of choices for buyers now. You can put in an offer now and get accepted. It’s better for buyers.” Malic is selling her San Pablo home and visited the house to get ideas for staging.
A recent industry study seems to indicate that Malic’s comments are on the mark. Home inventory levels increased 3.5 percent at the end of August to 2.86 million existing homes available for sale, according to the National Association of Realtors. Inventory levels also were up 2.6 percent at the end of July from the previous month.
The afternoon sun cascaded into the living room through brand-new, stark-white, floor-length drapes, and the sparse visitors moved through the house at a leisurely pace, barely speaking. Gone were the competitive glances at other visitors, the intense energy of past showings. Even during a brief interlude with four or five people in the room at once, the mood was still relaxed.
“We’ve looked at six places in three weeks,” said Rafael Amador of Richmond, the lone buyer in the group. Skimming a flyer for another property, Amador said, “I’m not interested in anything we’ve seen yet.”
Resnick, who lived in Richmond for 20 years and specializes in properties there, said, “The balance of power appears to be shifting to the buyer.”
Houses on the lower end of the spectrum are the exception, Resnick said. The Realtor said that lower-priced residences are still getting multiple offers. “I had a listing in the mid-threes ($300,000s) that went over asking,” Resnick said.
Dorothy Amiri, a Richmond resident who is selling her house, agreed with Resnick that lower-priced homes are still seeing a good deal of activity. “This neighborhood is still one of the more affordable ones in relation to other areas,” Amiri said.
Overall, though, most visitors at the open house agreed that the market is slowing, with one noting the large number of for-sale signs going up and staying up in the area.
“August is slow, so everyone said maybe that was what was going on,” said Resnick. “Then September came, traditionally a busy time, but things are still not going quickly. There’s a palpable change in the market.”
It was apparent that the owners had pulled out all the stops in preparing the house to sell. The stucco exterior had a fresh paint job, light beige accented by light green window molding. A freshly laid sand path bracketed with stones wound through the back yard. The house was clearly unoccupied; every room was staged, with empty closets and only a few items of furniture.
Yet, with all that work, buyers were few and far between for the property. The situation brought home the findings of the University of Michigan study, which said consumers’ reaction to high home prices had created consumers’ least favorable assessment of home-buying plans in nearly a quarter-century.
“We all knew it wouldn’t last forever. We just wanted it to last a little longer,” said Resnick. “Buyers got to the point where they felt they couldn’t take it any more. Maybe the prices got too high. Their pocketbooks couldn’t take it.”
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