The Crazy Game Of Overbidding
A report from the Oregonian. “After a record-setting July, the local real estate market cooled slightly last month but continued the trend of year-over-year growth, according to the latest numbers from the Regional Multiple Listing Service. Brigitte Pascutoi, managing principal broker in John L. Scott’s Beaverton office, said in a statement that ‘prices appear to be hovering around their high point.’ ‘We see a plateau between $346,495 for a median Hillsboro price and $382,000 for a median Beaverton price,’ Pascutoi said. ‘The market has been cooling this past month and hence the plateau in price. … Despite this somewhat shy but consistent decrease in market action, we are still in a strong sellers’ market.’”
King 5 News in Washington. “Seattle’s red hot housing market seems to be putting the American dream of home ownership on hold for many, according to a new survey by Zillow. The survey shows a vast majority of renters don’t see themselves owning homes in the near future. Only two percent of Seattle renters said they plan to buy a house in the next 12 months. Last year, 7 percent of respondents said they planned to buy in the next year.”
“‘I’m in no rush to buy,’ Alok Lathi said Sunday. His family recently moved into a three-bedroom house in Seattle’s Queen Anne Hill neighborhood. ‘I don’t want to play the crazy game of overbidding,’ he said.”
The Tampa Bay Times in Florida. “The Florida tourism industry has an affectionate relationship with Canadian snowbirds. Some economists worry that the usual influx of Canadians — who own property here, spend weeks in seaside vacation rentals and camp out in RVs across the state — may rethink their travel plans this year as their economy slumps and the U.S. dollar remains strong.”
“‘What very well could dampen Canadian visitation this winter is how their economy contracted during the first six months of this year,’ said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida. ‘The good thing is it’s still cold and snowy up there, which could still drive people here. But they face some significant headwinds for their economy. The Canadian dollar depreciation means they’re paying more for every hotel rate or theme park ticket. That’s a big jump in prices for Canadians who are already facing a weak economy.’”
“‘When we have room rates that are going up in price and the value of their currency is dropping, that could definitely be a double whammy,’ said David Downing, executive director of Pinellas County’s tourism marketing agency. ‘The last time we saw a fluctuation like this was in 2009, but it wasn’t as pronounced because the U.S. wasn’t doing so well, either.’”
The Kingman Daily Miner in Arizona. “The average home price in Kingman and Golden Valley increased to $138,879 in August, compared with $127,453 in the previous month, according to statistics from the Kingman Golden Valley Association of Realtors. Pat Tenney, a mortgage officer with Midwest Financial in Lake Havasu City, said she’s not so sure about the appreciation percentages. Tenney gets home purchases and refinances that are constantly running into appraisal issues.”
“‘So they say everything’s getting good, but I don’t know what’s going on out there,’ the mortgage specialist said. ‘I ask Realtors why prices are going up and appraisals are low and I see price reductions coming across my e-mail every day. There are people that bought during the bubble when everything was overpriced and now they’re pricing at reality, and I agree with that.’”
The Midland Reporter Telegram in Texas. ” Karr Ingham, the Amarillo economist who prepares the Midland-Odessa Regional Economic Index for the Midland Development Corp. and Security Bank, reported the sixth consecutive decline in the index for July. He said the decline from June to July was also the largest month-over-month decline so far since the index turned downward. Ingham said housing sales rebounded slightly, however, sales are down 8.7 percent so far this year compared to last year. ‘When you don’t have a sense of optimism for the future, especially for your job outlook,’ you’re reluctant to invest in a home, Ingham said.”
“Another reason is that Midland-Odessa housing prices remain high, though they have retreated slightly, he said. Midland-Odessa real estate is ‘an interesting market to watch; it is so out of whack,’ he said. Traditionally, up-cycles would produce high housing sales and prices, whereas a down-cycle would produce falling sales and prices. But in Midland-Odessa, ‘there was a time prices were rising so rapidly not everyone could afford to be in the market. Our hope is for prices to come down and the market to come into alignment with what would be considered reasonable pricing levels. The market has settled down in terms of price increases, but we still haven’t seen prices come down very far,’ he said.”
The Wall Street Journal on New York. “The first telltale signs of a softening of the white-hot Brooklyn rental market have come into view. As a torrent of new inventory washes across the borough, a handful of REITs, analysts and developers are sounding warnings about a possible supply glut that could play out over the next couple of years. Fanning the fears of saturation are scores of multiunit glass towers that are opening, topping out or breaking ground in Downtown Brooklyn, Williamsburg, Greenpoint and Fort Greene.”
“In any hot market, developers ‘tend to overdo it…get excited and go too far,’ said Drew Babin, senior research analyst at Robert W. Baird & Co. who tracks both Equity and AvalonBay Communities Inc., another multifamily owner that in July cited weakness in its Brooklyn portfolio. ‘New supply can eventually kill rent growth, and you’re seeing an overhang of new supply in Brooklyn,’ Mr. Babin said.”
