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Fewer Bidding wars And Increased Housing Inventory

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Kerry Fisher lost at least eight homes in the past four months to faster and more cash-rich buyers.

But recently an agent called her, asking if she was still interested in a home she thought she’d lost. She expects to close on the $195,000 condominium later this month.

“That was different,” says the 41-year-old escrow assistant, who lives in Orange County, Calif., one of the nation’s hottest real estate markets the past year.

Her experience points to a slightly kinder housing market for buyers in parts of the U.S., especially the West, as more homes come on the market, asking prices show signs of slowing and higher interest rates keep more shoppers at home.

“The market has become significantly more balanced,” says Glenn Kelman, CEO of real estate brokerage Redfin. “There just isn’t the madness we saw before.”

Through June this year, U.S. home values gained 10%, CoreLogic says. That’s the fastest pace since 1977, but there are signs that may not last much longer.

Nationwide, asking prices — a leading indicator of sale prices — were up 3.3%, on a seasonally adjusted basis, in May, June and July from the previous three months, according to real estate website Trulia.

That increase is robust, but it’s less than the 4.2% jump that occurred from the three months ended in January vs. the three months ended in April, Trulia says.

In some of the hottest real estate markets, including Las Vegas, San Francisco and Portland, Ore., increases in asking prices have narrowed even more in recent months, Trulia says.

Pending home sales — which typically result in final sales a month or two later — also dipped in June, the National Association of Realtors says. Rising interest rates started to weigh on buyers.

The market’s pace is “a little less frenzied,” says NAR economist Danielle Hale.

FEWER BIDDING WARS

Strong competition for homes has helped drive prices higher. But bidding wars appear to be ebbing as well.

In July, 63% of buyers’ offers on Redfin faced competition in 22 markets coast to coast, its data show. That’s down from 68% in June and the peak of 76% in March.

Some markets saw even bigger monthly drops. Boston fell to 65% of offers in July from 74% in June. San Francisco eased to almost 80% of offers from 90%, Redfin says.

Some of the slowdown is likely seasonal. People go on vacation in July. More inventory also plays a role. Nationwide, the seasonally adjusted inventory of homes for sale was up 6% in June from January, NAR data show.

“There’s been a surge of inventory,” says Robin Kingsbury, agent with Red Oak Realty in the San Francisco Bay Area. “But that means instead of getting 15 offers, you’ll get five to eight.”

Nationwide, the for-sale home inventory was down 5.2% in July from a year ago. That was an improvement from January when it was down 16% year over year, Realtor.com says.

From June, inventory was up 1.4% in July. Some markets, especially in the West, posted bigger monthly gains. San Diego had a 13% jump. Los Angeles and Orange County, where Fisher was shopping, saw inventories rise 8%. Orlando was up 12%.

“Larger inventories, especially in the hotter markets that experienced rapid price increases in the spring, are expanding buyers’ choices and helping to moderate price increases,” says Steve Berkowitz, CEO of Move, which operates Realtor.com.

SLOWING GROWTH IN HOME VALUES

Growth in median home values in some markets has been slowing, says Zillow economist Svenja Gudell.

In Miami, for instance, median home values increased 0.7% in May from April and 0.6% in June from May.

But in the previous five months, values rose at least 1% month to month, Zillow data show.

Values in San Jose, Calif., rose about 1% month to month in May and June. They increased at a 2% plus clip in the three prior months, Zillow says.

Slowing price gains wouldn’t be a bad thing, says John Burns, CEO of John Burns Real Estate Consulting.

Rapid appreciation encourages flipping — when homes are bought and resold in short intervals for fast profits — and pushes home prices into unaffordable territory as wage gains lag.

If prices keep rising as fast as they have been, “It will create a bubble,” Burns says.

Zillow’s panel of 106 economists and real estate experts predicts home values will end this year up 6.7%. Appreciation will slow to 4.4% next year, the panel says.

Kelman even expects prices to flatten or decline in some markets this fall as inventories increase.

“It isn’t just going to be up, up and up,” he says.


Red Flags To Look For When Purchasing a Home

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A Few Red Flags To Look For When Buying Real Estate

If you’re looking to purchase real estate, keep in mind that the homes you are considering might be in need of repairs or improvements.

In a recent study done by a major home inspection company, at least 40 percent of previously owned homes on the market have at least one serious issue or defect.

When buying real estate, you should have a professional inspection performed on the property to look for any issues that might not be visible to the untrained eye.

It’s better to identify this damage before you buy so that you are not stuck with budget-busting renovations.

Below are a few major red flags you should look for when buying a home.

Foundation Damage

Look at the slope of the yard. If the land slopes towards the house, this could be causing water to run down into the foundation, which will result in moisture damage. Take a look at the foundation for any bulges or cracks that could indicate serious issues.

Faulty Wiring

Your home inspector should be sure to check the electrical wiring — especially if it is an older house. If there are any flickering lights, circuits that don’t work, or warm outlets, these are telltale signs of wiring issues that might be expensive to fix.

Ceiling Stains

This is usually a sign that something in the house is leaking. Ceiling stains are common underneath bathrooms when a toilet, shower or bathtub has a leak. A leaky roof could be an even more expensive repair.

When you are negotiating to buy a house and damage is discovered, you can either change your mind about the sale or renegotiate for a lower price that factors in the cost of repairs. Either way, it is always worth having the home professionally inspected to identify red flags and avoid any surprises


Staging Ideas When Selling Your Home

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One of the fastest growing real estate considerations in America today is something called “staging” your house, meaning furnishing, decorating, outdoor clean-ups and ultimately arranging homes in such a way to attract increased buyer interest.

Outdoor staging

A recent national survey indicated that staged homes sold on average in 13.8 days, while non-staged homes sold in 30.9 days. Because your home is competing with other nearby comparable listings, staging your home is important for getting the best price when you sell. Here are some outdoor staging tips to optimize your curb appeal, give you a competitive edge vs other homes for sale in your area, and sell your home quickly.

Ensure your flowerbeds are turned, weed free, and properly edged. All hedges should be evenly trimmed and the lawn regularly maintained. It’s a clear indication that you are a conscientious homeowner and that you value your home’s appearance. If you’re not into gardening, paying for a quick landscaping job might be well worth the investment.
Check to make sure all outdoor lighting is in good working order. Consider leaving them on slightly longer than normal to encourage potential ‘drive-by’ viewings from interested buyers during the evening hours.
Ensure your front entryway is presentable. A great exterior accent piece is a freshly painted front door, which, when combined with a few seasonal potted plants, will create a more welcoming entranceway for prospective buyers.
Polish the front doorknob or handle and replace a dented or tarnished mailbox. Make sure your home address numbers can be easily seen from the street to facilitate potential viewings.
Check if your aluminum siding or brickwork needs washing or your gutters need cleaning. If dead leaves are spilling over from your eaves troughs, buyers tend to get a negative impression.
If you have a wood deck, make sure the stain or paint looks fresh. Good-looking patio furniture will contribute to the look of the backyard. If yours looks slightly run down, consider purchasing a new set – something you can take with you when you move.
Clean up yard clutter and put away the kids’ outdoor toys to help enhance the size of your yard.
Ask your Better Homes and Gardens® Real Estate agent to review the outdoor space and make suggestions that will enhance your home’s appearance