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Pending home sales in the Portland metro area in June fell at the fastest pace since the pandemic began in 2020, further evidence that the real estate market is cooling rapidly.
Some 8% of pending home sales contracts in the Portland area failed in June, less than the national average of 15% and less than New England’s highest, 14.8% in the metro area of New Haven, Connecticut, according to new Redfin online real estate market data. The contracts on these houses, however, could have been concluded before June.
The news follows other data from Redfin showing that 7.1% of its 852 active listings saw price declines in the Portland area from May 30 to June 26 compared to the same four weeks last year. . Active listings are down 29% in the four weeks from a year ago.
Canceled sales, along with fewer multiple offers and fewer home visits, give buyers more bargaining power. That includes the demand for inspections, which have been pushed off the negotiating table for the past two years as buyers forgo concessions to better compete for a home.
“It’s still a seller’s market, but there’s more room for negotiation,” said Jeff Mateja, agent at Keller Williams Realty.
Mateja still sees several offers for houses, but instead of 15 or more six months ago, there are now three or four. But it’s still a lot if a pending offer fails. He noticed the cooling of the housing market with the start of the war in Ukraine in late March, when more uncertainty about the global economy took hold.
Among the reasons sales are failing are buyers feeling remorse after rushing to buy a home and rising mortgage rates are making homes no longer affordable.
“Buyers are increasingly keeping rather than foregoing inspection and appraisal contingencies,” said Taylor Marr, Redfin’s deputy chief economist. “It gives them the option to cancel the transaction if any issues arise during the home buying process.”
In Cape Elizabeth, two homes returned to the market last week after potential buyers pulled out when they discovered problems during inspections, said real estate agent Bethany Angle, owner of Angle Associates.
“They probably got cold feet,” she said. “It’s a really tough market.”
Angle also noticed that real estate brokers advertise more as the market cools.
It is not always the buyer who abandons the transaction. Some sellers are listing their homes just to test the waters and see how they’ll do, said Brian Wood, a broker at Coldwell Banker in Portland.
He did notice, however, that more and more homes were being put up for sale on the market, with sellers more confident that they could find another home for themselves.
“The market has gone from hot white to hot,” he said.
Buyer activity is down across all sectors of the real estate market, said Erin Oldham, associate broker at Portside Real Estate Group. Condominium indexes in Portland went from 10.6 per condo on the market in February to an average index of 6.8 in June. Portland home visits fell from 20.3 in February to nine per home in June.
Oldham said the activity displayed is an indicator of the current housing market, while home sales data lags about 45 days behind, as that’s how long it takes to close a home.
“We’re still solidly in a seller’s market, but the trend is for more supply and homes are taking a little longer to sell,” she said.