The Price For Unsellable Properties Is Just Too Damn High
The Sun Sentinel reports from Florida. “The median price for existing, single-family homes in January hit $285,000 in both Palm Beach and Broward counties, local Realtor boards said. That represented annual increases of 4 percent in Palm Beach and 8 percent in Broward. The number of home listings remains low across South Florida, and that typically gives sellers the upper hand. Even so, real estate agents say they’re noticing a shift in the market that’s giving buyers more leverage than they’ve enjoyed in the past few years. Many sellers are overpricing their properties, but savvy buyers can see the padded prices and are refusing to cave, agents say.”
“‘Sellers are being irrationally exuberant, and that’s playing into buyers’ favor,’ said Gary Lanham, an agent with Coldwell Banker in South Florida. Lanham said a Fort Lauderdale house recently was listed for $396,000 — a heady price for a two-bedroom property with no pool. Finding a few issues with the inspection report, a prospective buyer, Lanham’s client, insisted on and received a $15,000 discount off the sale price. The deal is expected to close in March. ‘Buyers have a lot of confidence right now,’ Lanham said.”
The New York Post. “Manhattan’s real estate market may be at an all-time high (median sale price: $1.15 million) — and weighted with cutthroat competition — but that doesn’t mean every single apartment is getting snapped up. No-buyer syndrome disproportionately affects very expensive properties. More than a dozen experts interviewed by The Post agree the price for most of these ‘unsellable’ properties is just too damn high.”
“‘If the apartment has been sitting on the market for more than a couple years, there’s a problem,’ says CityRealty’s director of research Gabby Warshawer. ‘The market is responding. It’s saying, ‘No!’”
The Green Valley News in Arizona. “Challenging. That’s how Ginger Kneup, with Bright Future Real Estate Research, summed up the regional and local housing market this week. She presented a similar outlook to the Sahuarita Town Council. The greater Tucson region in general – and Sahuarita in particular – continue to have a market plagued with a high number of foreclosures, a lack of demand and the stumbling block of slow job growth. Kneup said part of having so many distressed homes on the market means it’s harder for existing houses to appreciate in value.”
“In Sahuarita, the difference between the price of a resale and a new home is about $70,000, she said. So new homes in the area are competing against larger homes built only 10 years ago that haven’t appreciated, Kneup said. ‘A 2,600-square foot home should be a move-up home, but it’s not,’ she said.”
The Philadelphia Inquirer on New Jersey. “As New Jersey lawmakers consider taking over Atlantic City’s finances and asking voters to approve casino expansion to the northern part of the state, a new report paints a bleak picture of the ailing resort town’s underlying economics. Job loss is the new normal, the labor force is in ‘free fall,’ and the housing market is ‘moribund,’ according to a report by the South Jersey Economic Review, published by the William J. Hughes Center for Public Policy at Stockton University.”
“The metro area’s population declined last year for the first time since the late 1970s. Meantime, one in every 261 residential properties in Atlantic County was in some state of foreclosure in December, more than double the statewide rate and nearly five times the national rate, the report says.”
From Bloomberg. “Dale Oxley doesn’t need to hear about rising odds of a U.S. recession to dread the future. For the West Virginia homebuilder, the downturn has already arrived. ‘Everyone is going to have to tighten their belts,’ said Oxley, the 48-year-old owner of a Charleston-area construction company. ‘The next couple of years are going to be difficult.’”
“Four states — Alaska, North Dakota, West Virginia and Wyoming — are in a recession, and three others are at risk of prolonged declines, according to indexes of state economic performance tracked by Moody’s Analytics. The regions suffering the most are in the flop stage of the energy industry’s boom-to-bust cycle, and manufacturing-dependent areas hurt by a rising dollar are at risk of receding. Louisiana, New Mexico and Oklahoma are all at risk of recession, according to Moody’s. Wyoming and North Dakota’s economies have declined for at least the past 10 months, according to the Philadelphia Fed.”
“Oxley’s Modern Home Concepts built four $500,000 custom homes last year in southern West Virginia, down from five in 2014 and fewer than half 2009’s level, when the last U.S. recession ended. ‘There is not a lot of job creation and you are not creating new households,’ he said. ‘I am not optimistic in regard to our future in West Virginia.’”
From MTN News. “From good times to bad in the Bakken oil region of western North Dakota and eastern Montana — in just 15 months. Officials in Williston, North Dakota — the heart of the region — stress that their town is still open for business, but the reality of the boom and bust cycle of the nation’s oil industry is taking a toll. Over the past year and a half, the city of Williston went from the fastest growing small city in the country to a town dealing with layoffs, and nervous investors.”
“Hotel room vacancies in town are now running close to 30 percent; at the height of the boom, hotel vacancies in Williston were rare. If you were lucky enough to find a room, nightly rates of more than $300 were commonplace. A shortage of housing has flipped to a market where apartment vacancies now run around 40 percent. Department of Mineral Resources director Lynn Helms says the oil price weakness is now anticipated to last well into this year’s third quarter. ‘Operators are now even more committed to running fewer rigs as oil prices remain at very low levels,’ said Helms.”
The Casper Star Tribune in Wyoming. “Fewer listings are on the market than at this time last year, and a slightly lower number of homes have closed, Burridge said, but the average sale price of a home has actually increased. The average sale price for residential properties in Natrona County in January 2015 was $225,142, she said, and this year it’s $232,248. ‘If they’re going to sell, and they want to sell, they’re not going to be ridiculous with their pricing,’ said local Realtor and developer Lisa Burridge. ‘They’re going to be much more conservative, take a much more conservative approach and list the property at the right price to begin with.’”
“It felt like a handful of people would come in each week and tell Elizabeth Meyers they lost their jobs, they were moving out of the state and that they were leaving almost immediately. Meyers, the business manager at The Preserve at Greenway Park said that at this time last year, almost all the apartments were full. Three-bedroom apartment rent prices have fallen by 27 percent in the last year, Meyers said, and that was done just to keep The Preserve above water during Casper’s economic decline. ‘We’re trying to stay competitive enough to maintain some occupancy,’ she said.”
“Even offering a free month’s rent hasn’t restored occupancy at luxury apartments like The Preserve. The complex opened when Casper was booming and is now experiencing the busts that Casper residents know all too well. ‘I would argue — I mean, we are are the most expensive — we would argue we’re the nicest in town,’ Meyers said. ‘I think that because of that, we’ve lost a huge part of our demographic, which are the people making really good money in oil-related positions. Any of the good-paying jobs just seem to have kind of dissipated.’”
