Buyers Aren’t Seeing What Looked Like A Bargain
The Mercury News reports from California. “The turbocharged Bay Area housing market ran out of gas in July as the region turned out the lowest annual price gain in almost two years, according to Corelogic DataQuick. It’s most likely the inevitable winding down of a long run of astonishing price gains. Single family home prices are up about 50 percent in two years in Alameda and Contra Costa counties and about 25 percent in Santa Clara and San Mateo counties, and are up about 40 percent in the nine-county Bay Area. ‘Inventory has crept up, and more inventory is coming on all the time now,’ said Barbara Lymberis, with Perfect Harmony Properties in San Jose’s Willow Glen.”
“Alameda County, which along with San Francisco saw the sharpest year-over-year price gains in July, is cooling off in August, according to Glen Bell of Better Homes and Gardens Real Estate in Berkeley. ‘Prices are leveling off and we’re seeing some downward pressures,’ said Bell, who tracks the East Bay housing market. He said that about 13 percent of homes for sale in Berkeley have seen reductions in asking prices, and even more are slow to sell. ‘It’s an eye-opener for a lot of agents,’ Bell said.”
The San Gabriel Valley Tribune. “Southern California home sales hit a three-year low for the month of July and the region’s median home price dipped to $413,000, industry tracker CoreLogic DataQuick reported. ‘Prices came a long way in a couple of years, and now a lot of would-be buyers just can’t stretch their finances enough to buy in today’s more conservative lending environment,’ said CoreLogic DataQuick analyst Andrew LePage. ‘The more spectacular annual price gains of a year ago — over 20 percent — seem far back in the rear view mirror now.’”
“‘It’s really being driven by sellers, in my opinion. They are listing their properties way too high. I don’t want to say they are greedy …. but they always add another 10 to 15 percent on top of what the fair market value is. But buyers are not fooled by it. And as soon as we reduce the price the home sells within a couple weeks,’ said Robert Smith, a Realtor with Centennial Realty in Valencia.”
The Glendale News Press. “Anne McDonald, a Realtor with Hall & Chambers Real Estate in Glendale, said properties that are ‘listed at the right price’ are still seeing multiple offers, while prices are being reduced more often on homes that may be overpriced for the market and have not sold for several months. Prices are also being reduced more often on ‘unique’ homes, which may not have a yard or have small bedrooms, McDonald said. And as more homes go up for sale, it’s having a calming effect on the market. ‘As inventory rises, prices are stabilizing,’ McDonald said.”
The Union Tribune. “From June to July, the median home price in San Diego County declined by $5,000. At the same time, activity in the county’s real-estate market declined both over the month and annually. In July, there were 3,474 transactions closing in San Diego County, down from 3,736 in June, and an 18.5 percent drop from the 4,260 transactions in July 2013. In July, there were 8,122 active listings in the county, up from 5,443 a year earlier, the San Diego Association of Realtors reports.”
“Gary Kent, a La Jolla-based agent with Keller-Williams, said he considers the current housing market to be the first balanced market since 2000, meaning it’s not a strong buyer’s or seller’s market. ‘I think that’s partly because prices have reached the point that we have some people selling because they like the price they can get for the house,’ he said. ‘The flip side is that buyers aren’t seeing what looked like bargain prices anymore. Some buyers are dropping out of the market saying, ‘Well, it’s not a bargain.’”
From CNBC. “‘Homes that are in good condition and priced well are still selling quickly,’ said Geoffrey Schiering, a San Diego Realtor. ‘The inventory of homes for sale has risen slightly, but remains at a relatively tight 3-month supply. However, the number of closed sales has dropped substantially…this suggests that as some sellers have begun pushing their list prices higher, more homes are failing to sell.’”
The LA Times. “As the Stinson Beach County Water District board prepares to vote Saturday on a rationing regimen, the talk here is of the town’s split: full-timers whose numbers are dwindling versus an ever-increasing number of out-of-towners with multimillion-dollar second homes, many used as seasonal rentals. Vacation rentals are ‘a political hot button,’ and some longtime residents are calling for a ban said Sarah Butler, a broker with Oceanic Realty. But Butler called that notion ‘ridiculous. It’s what our economy is based on now. It would literally pull the rug out from under Stinson Beach.’”
The Press Enterprise. “When the California Homeowner’s Bill of Rights took effect in 2013, monitors of foreclosure activity across the nation predicted banks would take a collective pause on repossessions. RealtyTrac VP Daren Blomquist said he believes today that numbers are coming in to show the timeout is truly over. RealtyTrac reported that 575 homes were taken back by lenders in Riverside and San Bernardino counties in July, up 27 percent from July 2013. ‘What’s driving the increase continues to be the REOs,’ Blomquist said. ‘We have now seen five consecutive months where the bank repossessions have increased annually.’”
“Bank repossessions have rebounded in many other Southern California metro markets. San Diego’s overall foreclosure activity increased 12 percent in July from a year ago due to a 40 percent jump in REOs; Los Angeles’ overall foreclosure activity increased 10 percent as the result of a 58 percent jump in bank repossessions.”
“Blomquist said that banks that kept houses with mortgages in default out of the REO pipeline are coming out of limbo. ‘It demonstrates that the market is definitely improving, but there is a bit of a soft underbelly in California – still, with the lingering foreclosures that have been held back, in part, because of the Homeowner’s Bill of Rights,’ he said.”