A Slowdown In Sales And A Potential Supply Glut
A report from the Wall Street Journal. “Quicken Loans’s Super Bowl ad has sparked rumblings over whether we should worry about a new housing bubble. ‘What if we did for mortgages what the Internet did for buying music and plane tickets and shoes?’ a narrator says. The 60-second spot then opines about how Quicken’s new product, called the ‘Rocket Mortgage,’ might do that. It would unleash ‘demand for necessary household goods as our tidal wave of ownership floods the country with new homeowners who now must own other things.’ CNET says the ad ‘might send a shiver down your spine.’ Bloomberg Business says it falls into the realm of having ‘forgotten that the financial meltdown ever happened.’”
The Real Deal on New York. “Wary of a slowdown in high-end apartment sales and a potential supply glut, lenders are beginning to retreat from Manhattan’s luxury condominium market. Many banks are either cutting down their luxury condo construction lending or stepping away from the market altogether, according to brokers and lenders interviewed by The Real Deal. Developers, however, remain bullish that their product will sell, and are trying new avenues to obtain the financing.”
“‘Everyone’s a little worried,’ said Michael Stoler, a managing director at investment firm Madison Realty Capital. ‘With anything at $2,500 (per square foot) or more, lenders are very cautious,’ he added.”
The Miami Herald in Florida. “When Latin America sneezes, Miami catches a cold. So what happens when South Florida’s vital economic partner comes down with something really nasty? Real estate brokers aren’t shy about admitting that 2016 will be rough. ‘We’re going to see a slowdown [for condos] in 2016 across the board,’ said Philip Spiegelman of condo marketing and brokerage firm ISG. ‘We used to be able to close a deal with a foreign buyer in two visits,’ Spiegelman said. ‘But a lot of times now it takes four or five visits. It’s taking a lot longer to get to that ‘yes’.”
The Jamestown Press in Rhode Island. “Following a glowing statewide report, the island’s realty firms confirmed the bullish news that housing sales in 2015 were the highest in more than a decade. On the minus side, some of the prices — especially for luxury properties — sank ’significantly,’ according to Bob Bailey of Lila Delman Real Estate. Also with supply and demand, he described a mismatch between property conditions and the expectations of today’s luxury buyer. However, many of those listings were scooped up in the fourth quarter after anxious sellers lowered their asking prices, he said, leading to 30 percent of the year’s sales closing in the last quarter.”
The Tyler Morning Telegraph in Texas. “Home sales in Tyler in 2015 were great and sales in the East Texas region were good. Yet, while 2016 seems off to a solid start, there could be trouble brewing if oil and gas prices remain low. John Jarvis is a real estate agent in Emory, whose specialty is rural properties. ‘We’re starting to see oil prices affect sales in our five major cities, but not the degree it did the last time, in the 1980s,’ Jarvis said. ‘A friend of mine has just gotten laid off from his oilfield job, and he thinks oil might drop to the low $20s (per barrel of West Texas Intermediate crude). If that happens, and we start losing even more oil and gas jobs, that would trickle down to the home market.’”
“Claudia Carroll, chairwoman of the Greater Tyler Association of Realtors agreed. ‘For our area, the big question is oil and gas prices and whether that will negatively impact the market,’ she said. ‘I’m beginning to hear anecdotal indication that it might. I’ve had a couple of my own clients call and tell me they’re being affected. One is having to put his home on the market, and the other is pulling back from plans to move up.’”
The Dickenson Press in North Dakota. “Though contractors are still constructing speculative homes for market, Dickinson’s housing boom has largely tapered off. City Administrator Shawn Kessel said the city expects the number of permits issued this year to be ’significantly down’ compared to previous years, but that the trend does not come as a surprise. ‘It’s not unanticipated based on quantity that has been built in the last three or four years,’ he said. ‘Thousands and thousands, literally, of housing units — whether they be single-family or multi-family — have been constructed.’”
“While he said it’s too early to judge 2016, Tracey Hoff, owner of The Real Estate Co. in Dickinson, said housing remains active and the increase in availability is good for buyers. ‘In the past, if you went back to ’12, ’13 and ’14, (buyers) didn’t have a lot to look at — there was no inventory,’ he said. ‘I think the buyers are benefitting from this, and I think it’s a great opportunity because there’s a little more selection and they’re probably getting more house for the money.’”
