In many cities and towns across the country, the hallmark of the housing market this year has been fewer homes hitting the market, leading to multiple offers and even downright bidding wars for the homes that do become available. However, it appears that things may be starting to calm down…a bit.
According to a new report from the National Association of Realtors, pending home sales fell by 1.8% in July, marking the second straight month of declines.
Pending home sales, an indicator of future home sales based on signed real estate contracts, also fell in June.
The declines in June and July indicates that there may be bit of a slowdown in home sales in the coming months, but NAR Chief Economist Lawrence Yun suggests that the housing market may be returning to less hectic state.
“The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers," Yun said. "That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months.”
And if inventory does increase, that should decrease the number of bidding wars and multiple offer situations that have become commonplace in some of the nation’s hottest housing markets.
"Homes listed for sale are still garnering great interest, but the multiple, frenzied offers – sometimes double-digit bids on one property – have dissipated in most regions," Yun said.
But Yun noted that some people are electing to skip some of the traditional homebuying steps in order to secure their home and close faster.
"Even in a somewhat calmer market, a number of potential buyers are still choosing to waive appraisals and inspections," Yun said.
According to NAR’s report, as of July, 27% of buyers bypassed appraisal and inspection contingencies. An increase in inventory would help drive that figure back down.