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Monday, October 14, 2013

WSJ: More Homes for Sales, Fewer Sales, Slowing Price Increases in Certain Areas

by Calculated Risk on 10/14/2013 05:46:00 PM

From Nick Timiraos at the WSJ: Home Sales, Prices Slowing in Bust-and-Boom Markets

The sharp home-price rally in some of the hardest-hit housing markets is likely to fade in the coming months amid a pullback in investor purchases and steady increases in the number of homes listed for sale.
The rally began in early 2012 after investors aggressively bought up cheap foreclosed homes that can be rehabbed and flipped to end users or rented out to those who aren’t ready or able to buy, clearing an overhang of distressed properties. Meanwhile, many traditional buyers couldn’t sell their properties because they owed more than their homes were worth, keeping inventories very lean. As home prices warmed up and interest rates fell to rock-bottom levels, traditional buyers got in on the game, releasing pent-up demand.

Now, housing data is showing that the brakes could soon hit such sharp gains
Timiraos presents some data for Phoenix, Sacramento and Las Vegas. The increase in inventory, and decline in all-cash buyers in these areas is something Tom Lawler has been tracking too. This suggests price increases in these areas should slow.