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Buyers and sellers are feeling a shift in the housing market

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A Sotheby's For Sale sign in front of a home in San Francisco.

Mortgage rates have climbed, and the real estate market has cooled. Justin Sullivan/Getty Images

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In June, pending home sales fell 8.6% from the previous month, according to the National Association of Realtors. That’s the latest sign that the frenzied housing market we’ve come to know during the pandemic is finally cooling off.

So what’s it like to be buying or selling a home right now?

“We were finding that the market was crazy, that houses were being listed and contracted in 24 hours,” said Josh Landen, who started house hunting in the suburbs of Tampa, Florida, in early March.

So, when another buyer backed out of purchasing a new home under construction, Landen scooped it up. He signed a contract in April.

But while he waited for construction to finish, he noticed a shift in the building company’s promotional emails. “The incentives have been increasing, and prices were decreasing.”

He talked the company into letting him cancel his initial contract so he could take advantage of the new deals. “We got a, frankly, a nicer house in a better subdivision for less money,” he said.

As mortgage rates have risen, the housing market has cooled off drastically, said Lawrence Yun, chief economist with the National Association of Realtors.

“It does feel like someone just switched the light off,” he said.

With higher rates pricing out many potential buyers, he said those still on the market can afford to be pickier. Some sellers, like Mark Abermoske, weren’t prepared for that. He put his house outside of Madison, Wisconsin, on the market in April.

“We were basically told we would list on a Thursday, we’d do an open house Saturday, we’d take offers on Monday and it would be sold on Tuesday,” he said.

Three months and a few failed deals later, the house is finally under contract.

Micki Maynard is feeling that whiplash too. She listed her mom’s condo in Ann Arbor, Michigan, in early May. “The market we had expected to compete in literally vanished in a week.”

That condo is still on the market, and Maynard has had to lower the price and improve the property to attract buyers — concessions she didn’t expect to make just a few months ago.

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