The US housing market is losing some of its “frenzy” as more homes are for sale

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When Patrick Coleman bought a house in 2017, he beat eight other bidders and paid $ 100,000 above the asking price.

So after months of watching the rapid pace of property sales, this time he was prepared for even more competition.

Instead, it was a lot easier. Mr. Coleman wasn’t even looking for a home. He and his fiancée, image consultant Rebecca Jahangeri, loved their Washington, DC townhouse. Coleman recalled, “But I texted my dad and said, ‘Man, I could buy this thing.’ “Two days later, he and Ms. Jahangeri toured the six-bedroom colonial building and made an offer. It was accepted within a few hours. It was the first house they saw and there were no other bidders. They closed for $ 2 million in June.

“I was a little surprised, for sure,” said Mr. Coleman, 34, vice president of the Jim Coleman Automotive Group. “I feel happy.”

Last year’s wild housing market seems to be finally settling down.

More and more houses are coming onto the market, real estate experts said. In high-end properties in particular, the inventory is rising as owners who delayed sales during the worst of the pandemic list their homes. Owners who didn’t want to sell changed their minds after watching prices keep rising. Meanwhile, some deals have failed at the height of the frenzy, while overpriced houses are more likely to sit than being bought out immediately. The market is still hot, with strong demand backed by low interest rates, agents said, but buyers now have more options than a sense of normalcy.

“The market is no longer insane,” said Andrea Ackerman, real estate agent for Brown Harris Stevens in the Hamptons in the East End of Long Island.

Patrick Coleman and Rebecca Jahangeri in their newly acquired home in Potomac, Md.


Photo:

Stephen Voss for the Wall Street Journal

Existing home sales across the country fell for the fourth straight month in May, according to the National Association of Realtors. In June, the number of new listings launched nationwide rose 11% from May and 5.5% year-over-year, according to Realtor.com’s monthly property report. And while total active inventory is down 43% from the same period last year, that’s an improvement from a 60% difference in May, said George Ratiu, senior economist at Realtor.com. (News Corp,

Owned by the Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.)

“Sixty days ago we all felt like we were literally running out of inventory,” said Jonathan Boxer, real estate agent of Douglas Elliman in Aspen, Colorado, “and then things changed. We have started to win some new salespeople. “

Price growth has slowed as more offerings hit the market across the country, said Mr Ratiu. In June, the average share price rose 12.7% year-on-year, compared with a 17.2% increase in April. He assumes that growth will slow down further in the next year. Overall, Mr. Ratiu said, “I can see that this current market looks more like a normal market.”

Until recently, Brooklyn natives Michelle and Dan Mannix thought they would never sell their Orient Village mansion on Long Island’s North Fork.

“We used it throughout the pandemic and it was a godsend,” said Ms. Mannix about the house that the couple, who are serial entrepreneurs, bought for weekends and holidays 14 years ago. When the pandemic broke out, they moved to Orient all day with their son. “I would say, ‘We’ll never sell.’ Then suddenly things started to change. “

They watched in awe as property prices skyrocketed on the North Fork. A house a few blocks from hers sold for $ 2.5 million in 72 hours, “a lot more money than anyone had seen lately,” said Ms. Mannix, 50. What could you get for ours? ‘ That made our wheels spin. “

The couple, who moved back to Brooklyn in October, decided to bring the Orient House to market. They listed it on Town & Country Real Estate’s Lori Feilen for $ 2.466 million in late May. In mid-July, the Mannixes cut the price to $ 2.196 million. However, there were no bids yet and Ms. Mannix said there was more competition than she expected as new bids popped up after months when the small hamlet had virtually no homes for sale. “It felt like there never was, and now, since we launched our house, I’ve seen three or four really nice deals,” she said. “That’s a lot for the Orient.”

According to Realtor.com, there were 13 real estate listings in Orient at the end of June, 62.5% more than the monthly average of eight listings the area saw last year.


A country house vies for attention

Brooklynites Michelle and Dan Mannix are trying to sell their North Folk home as more listings go online in the area.

Brooklyn’s Michelle and Dan Mannix’s country house in the Orient Village on the North Fork.

Dorothy Hong for the Wall Street Journal

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While demand remains strong, the urgency of some buyers has diminished when going on vacation, visiting family, or spending the weekend at the beach rather than an open house, said Chris Itteilag of Washington Fine Properties, the gentleman Coleman represented Potomac on the purchase of a represented home. Others, tired of the high prices and competition, take a break from looking for an apartment. Highly sought-after properties still lead to bidding battles, Itteilag said, but others sit in the market, especially when they are overpriced or in need of renovation. “It’s more hit-or-miss or object-specific,” he said.

In Montgomery County, where Potomac is located, 1,855 new offerings were launched in May, up 49% from May 2020, according to Bright MLS.

Across the country, luxury homes are entering the market in greater numbers than lower-priced homes, Ratiu said. For the week ending June 19, the number of new listings above $ 1 million increased 17.5% year over year, while new listings below $ 350,000 decreased 7.4%, according to Realtor.com. The total inventory of homes for sale above $ 1 million was still 23% year-over-year, but the number of listings below $ 350,000 was down 49%.

High-end deals are more common, in part, because investors who have bought single-family homes tend to buy cheap homes to maximize returns, Ratiu said. Another factor is that some sellers are overpricing their homes – a phenomenon he referred to as “a make-me-move price” – but unlike earlier in the pandemic, buyers are wary of overpaying.

For many sellers, it just wasn’t practical to list their homes during the early pandemic.

This was the case with Ms. Ackerman’s clients, Robert Kushner and Trevor Yoder. The couple have owned their barn-style home in Hamptons for 20 years, sometimes living there full time and sometimes using it as a weekend getaway from their Manhattan apartment. “We’ve had big Thanksgivings in this house for years,” said Mr. Kushner, 56.

But the couple are now developing a hospitality and housing project in Costa Rica, where Mr. Yoder has lived for months. They had planned to sell the East Hampton property and move to Costa Rica, but the pandemic made it difficult to complete the renovations they were planning to do before the home was listed. “When people buy or rent out here, they expect things to look as good as they do when they are brand new,” said Mr. Kushner.

Instead of selling it, they rented the property. Then when the Covid restrictions eased, they carried out the renovations as soon as possible, renewing the floors and repainting. They put the home up for sale on June 14 for $ 7.25 million and rented it for $ 195,000 for the month of August. The rent has since been reduced to $ 150,000. Mr. Kushner says they won’t sell unless they are happy with the price. “We want to see what the market can take right now,” he said. “If it sells, great. If it is rented, we also agree to it. “

Write to Candace Taylor at [email protected]

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