From Bloomberg this morning:
Maryam Safai’s 5,000-square-foot, five-bedroom colonial in Mahwah, New Jersey, has been on the market for a year, even after three reductions in asking price.
“I’m not going to give in to the market,” says Safai, 44, a dentist. “I’m not selling below our current asking price” of $1.69 million.
Like Safai’s northern New Jersey neighborhood, housing markets around the nation are cooling, mostly as the result of the Federal Reserve’s drive to push up interest rates. That has slowed price increases in most of the country and reduced demand for risky types of financing that caused former Fed Chairman Alan Greenspan to worry about “froth” in the housing market.
The trend is most pronounced in affluent neighborhoods in the Northeast, where prices soared the most during the real- estate boom. Median prices for existing homes in the Northeast were up 5.2 percent in February from a year earlier, compared with almost 18 percent in the previous 12-month period, according to the Realtors group.
While damping price growth the most at the high end of the market and in the Northeast, rising rates have also reduced demand for riskier forms of financing and begun a shift of power from sellers back to buyers, economists and brokers say.
In a sign that buyers are starting to gain the upper hand, pre-sale home inspections are back in vogue in Montgomery County, Maryland, says Meg Finn, a Long & Foster agent based in Bethesda. Just a year ago, buyers who insisted on inspections jeopardized their chances of getting a house in a bidding war, she says.
On a Boston street, lined with a dozen “For Sale” signs, McCormack is trying to sell a three-bedroom house listed at $535,000. She’s holding “commuter hours” open houses on Monday nights to lure would-be buyers on their way home from work.
“When the market was hot, we never would have had to do this,” she says.
(Credit goes out to Ben at The Housing Bubble for finding this one)