February 4, 2016

From High Cotton, Coming Back To Reality

The Union Tribune reports from California. “San Diego County home prices were up 0.7 percent in November, below the national average, said the S&P/Case-Shiller Home Price Index. In the last 12 months, San Diego County home prices increased 6 percent, passing the national average of 5.3 percent. But the last three months have shown a comparatively slow market for San Diego. From August to November, home prices increased an average of 0.4 percent. ‘Prices, and rents too, are bumping up against peoples’ ability to pay,’ said Dana Kuhn, real estate lecturer at San Diego State University. He said San Diego was, in part, losing ground to other cities because the local population is moving away for financial reasons. ‘It’s now becoming more and more common for people to leave for more affordable locations,’ Kuhn said.”

The News & Observer in North Carolina. “A New York developer has acquired SkyHouse, the 23-story luxury apartment tower that opened in downtown last year, for a record $103 million, according to Wake County property records. World Wide Group acquired the property from the development group behind the project. The price shatters the previous record for the most ever paid for a Triangle apartment complex on a per-unit basis. WWG paid nearly $322,000 per unit for the 320-unit SkyHouse tower.”

“The price is all the more impressive when you consider SkyHouse, which opened in April, is still leasing up. More than 80 percent of its units are now rented, according to the Downtown Raleigh Alliance. ‘World Wide Group takes a long-term view to all of our real estate investments and we see a tremendous growth opportunity in Raleigh’s luxury marketplace,’ David Lowenfeld, WWG’s chief operating officer, said in a statement.”

Crain’s Chicago Business in Illinois. “With only a few days left before the post-Super Bowl home selling season, homeowners in some Chicago suburbs might consider waiting on the sidelines a little longer. In Burr Ridge and Lake Forest, 2016 dawned with enough homes on the market to feed at least 10 months of sales, according to a report from Midwest Real Estate Data. When the inventory is so high, ‘if you need to list your house, it has to be in the top 10 percent of the prettiest and the bottom 50 percent on price,’ said Tracy Wurster, a Berkshire Hathaway HomeServices KoenigRubloff agent in Lake Forest. Otherwise, ‘it won’t get noticed.’”

“While an oversupply of homes bugs sellers, it gives buyers a strong advantage. They have many options and likely can take their pick at a nice price. Yesterday buyers closed their $1.55 million purchase of a house on Ashton Drive in Burr Ridge whose sellers first put it on the market in early 2014 at just below $2 million.”

“At the moment, all the suburbs with the tightest inventory are generally lower-priced than all those where it’s loosest. One reason for loose inventory is that more affluent homeowners may be more financially able to wait for their price, Nugent said. ‘A famous line with sellers is, ‘I don’t need to sell,’ she said. ‘My question is, ‘Then why are we sitting here at this listing meeting?’”

The Tampa Bay Times in Florida. “Florida might have a short supply of homes for sale, but there’s no shortage of people hoping to sell them. Last year, 28,507 people passed the Florida real estate exam and became licensed sales associates. That’s the most in nine years and a whopping 142 percent jump from the low point in 2010. The dramatic increase gives Florida a total of 221,000 real estate agents, right at the time when many are bemoaning the dearth of homes on the market.”

“Bob Hogue in St. Petersburg, whose school is one of the state’s largest, has been in business since 1978. He said it could take years for inventories to return to normal because so many borrowers — more than 100,000 in the bay area — are still underwater on their mortgages and don’t want to put their homes up for sale if they can’t at least break even. ‘There are still so many people stuck in that spot, it casts a negative pall over the market,’ Hogue said. ‘I don’t think we’re going to see a real strengthening until almost everybody is out of that spot.’”

The Odessa Amercian in Texas. “Odessa home sales fell more than 25 percent in the last three months of 2015, while median home prices dropped just 3.5 percent, according to a new report from the Texas Association of Realtors. Meanwhile, rent prices in Odessa and Midland have fallen quickly. A one-bedroom in Odessa now averages $830 per month, less than the state average and more than 25 percent less than at this time in 2015, according to a February 2016 report about Texas rents released by Apartment List on Monday. A two-bedroom in Odessa averages $1,090. Rates in the Tall City saw a similar change but remain higher, with a one-bedroom averaging $950 per month, or about 22.5 percent less than at this time last year.”

“Ivey said he would not expect home prices to drop by such a percentage, reasoning that home values did not soar to the same degree that apartment rates did during the boom. Still, he said some relief in the housing market is long overdue. ‘Everything’s down — the median sales price is down, the number of active lists is up — and so you think Man, we are falling off the face of the Earth,’ said Warren Ivey, owner of Century 21 in Odessa. ‘But we are not. A year ago we were in high cotton. Now our consumers, our buyers, are starting to get a little breathing room and it’s coming back to reality.’”

Bits Bucket for February 4, 2016

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