Those living in the Midwest may need to accustom themselves to new buying tactics such as biding wars, waived home inspections and rapid-fire offers due to the decline in homes on the market over the past year, according to an article by Patrick Clark for Bloomberg.
Stricter lending standards could be the reason for this decline as it has made cities with strong job growth and lower home prices more attractive to buyers, according to the article.
From the article:
In cities showing less robust job growth, the short supply of homes for sale might be explained by another factor: Prices in about half of the country's local markets are still below bubble-era peaks. Owners may be reluctant to sell their homes for less than they were once worth, especially if they owe more on their mortgage than they can get in a sale, said Jonathan Smoke, chief economist at Realtor.com. That limits the supply on the market. The inventory squeeze has proved especially harsh for first-time home buyers, in part because builders have prioritized luxury homes over starters.
A theory making the rounds at Redfin contends that trends in buyer behavior start out West and move eastward. In California, for example, parents are taking out home-equity loans on their own homes to help children muster all-cash offers on a property, Richardson said. Once the deed has transferred, the kids borrow against the home they just bought to repay their parents.
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