May 13, 2015

Haves And Have-Nots

The Denver Post reports from Colorado. “Metro Denver leads the nation’s major metro areas for home price appreciation this year. The median price of a home sold in the Denver-Aurora area rose 17.2 percent, to $338,100 in the first quarter of 2015 from $288,400 in the first quarter of 2014, according to the National Association of Realtors report. Sherman, Texas, led the country with a 33.4 percent gain in the median sold price in the first quarter, rising to $123,400 from $92,500. Next was Port St. Lucie, Fla., where the median home sold price went to $172,000 from $139,900, up 22.9 percent.”

“Metro Denver’s median home sold price is now about 65 percent more expensive than the national average, but residents have only a median household income that is 18 percent higher to cover those heftier home payments, according to the U.S. Census Bureau.”

The Wall Street Journal on New York. “It’s getting crowded at the top of Manhattan’s apartment market. As condo developers chase billion-dollar paydays through the construction of luxury dwellings, the cranes dotting the city are sparking fears of a supply glut. Builders are plowing ahead with scores of condominiums priced above $20 million in skinny glass towers throughout Manhattan. Land, meanwhile, has gotten so pricey that developers buying many new sites must expect to sell units at more than $3,500 a square foot to make a profit, real-estate experts say—three times the break-even level of a few years ago.”

“There are signs demand for this rarefied product might be nearing its limits. The 1,004-foot green glass tower One57 remained about 25% unsold for much of last year. Its builder, Extell Development Co., lowered its expected total revenue from the building by about 4%, or $100 million, in part because of the slowdown, according to filings made with the Tel Aviv Stock Exchange in Israel, where Extell has issued $300 million in debt.”

“‘There are a finite number of people that will buy these,” said Jonathan Miller, president of Miller Samuel. As for the developers kicking off projects now, ‘You are going to have haves and have-nots.’”

The Real Deal on Florida. “Home prices are coming down to earth in Palm Beach County, after soaring by double-digits from 2011 to 2014. The county’s median home price stood at $279,000 in March, down 2.8 percent from a year earlier, according to the Realtors Association of the Palm Beaches. That represents the third consecutive monthly decline. ‘Things are definitely flattening out,’ David Cobb, South Florida regional director for research firm Metrostudy, told The Real Deal.”

“So what has caused the slide? Part of it is falling demand from hedge funds and other investors, Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach, told TRD. Investors have accounted for 40 to 50 percent of sales in recent years. ‘In the last six months, they have slowed down their acquisitions, so that even though sales volume has increased, prices have dropped,’ he said. ‘About 90 percent of new construction is unaffordable for 90 percent of the population.’”

The Washington Post. “Eager buyers and motivated sellers have jump-started the D.C. region’s housing market this year. April’s housing data, released by RealEstate Business Intelligence, shows most jurisdictions saw price increases with the exception of Alexandria, Loudoun, Anne Arundel and Frederick. Alexandria’s median price sank to $459,500 last month from $517,000 in April 2014. Loudoun’s median price fell to $420,000 from $423,000. Anne Arundel’s median price dropped to $300,000 from $307,700. Frederick’s median price tumbled to $248,000 from $255,200.”

“Buyers are finding more choices as the number of homes on the market continues to swell, growing to 10,867 active listings last month. Fairfax County has the most homes for sale (3,669 properties), followed by Montgomery County (2,950). The 8,713 new listings that came on the market last month were the most for a 30-day period in the past 60 months.”

The Baltimore Sun in Maryland. “Home sales in the Baltimore area surged in April, but the median home price dropped $10,000 on average from last year. Inventories remain high. The median sales price last month in the Baltimore region was $230,000, down more than 4 percent from last year, according to RealEstate Business Intelligence. The inventory of homes for sale continued to increase for the 19th consecutive month, with 12,659 properties on the market at the end of April, an increase of 5.8 percent compared to last April.”

“John L. Heithaus, RBI’s vice president of sales, said the drop in the median home price wasn’t anything to worry about. ‘I find it to be misleading and, worse, irrelevant to a typical homebuyer,’ he said. ‘It’s like a silly number. What you do want to see is price appreciation happening in the market. Appreciation is building and home equity is building, and that’s a good thing for the community.’”

“The problems of the housing market crash remain a drag, particularly in Baltimore City. Foreclosure activity in the city remains stubbornly high, with 223 foreclosure sales and 34 short sales in April — nearly 38 percent of all homes sold. Across the region, there were 580 foreclosure sales and 119 short sales, about 25 percent of all sales. ‘You could say foreclosure activity is too strong, but that’s what Baltimore’s been for a long time,’ Heithaus said. ‘Baltimore is definitely one of the higher foreclosure markets in the country, so I think we have good reason to believe that for the next three to four years we’re going to see a high number of foreclosure sales as the air gets let out of the balloon.’”

The Los Angeles Times in California. “The second of two partially remodeled houses in Hollywood Hills West owned by Osbourne family members has sold for $2.25 million — $100,000 less than they paid for it eight years ago. Held in the names of parental units Ozzy Osbourne and Sharon Osbourne, the property was reported to be daughter Aimee Osbourne’s home. Sister Kelly Osbourne’s larger place next door sold a week earlier for $2 million. That 1961 contemporary has 2,538 square feet of living space and had been purchased nine years earlier for $2.125 million.”

Bits Bucket for May 13, 2015

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