The Bubble Is Losing Its Air
A report from the Oregonian. “For the first time in recent memory, the number of closed and pending home sales in the Portland area saw an annual decline, according to the April Regional Multiple Listing Service’s monthly report. With the housing market on a tear, the report had become predictable from last summer into this spring – the number of closed and pending sales for a given month was either the most since before the recession, or the most of all time. But the 2,611 closed sales in April marked a 4.5 percent drop from the same month last year, and pending sales fell from 3,613 in 2015 to 3,076 this year.”
“The median reached $350,000 last month, the point at which half of homes are more and half are less; in April 2015, the median was barely above $300,000. Homes in desirable areas often receive double-digit numbers of offers. ‘The buyer who did win the bid may have a Monday-morning headache crunching the numbers on how much they just paid,’ said Israel Hill, a managing broker at John L. Scott Real Estate specializing in Northeast Portland.”
The San Mateo Daily Journal in California. “The residential real estate market typically heats over the summer, but after years of a sizzling home sales industry along the Peninsula, some local money lenders are sensing a cooldown on the horizon. Uncertainty regarding the sustainability of the ongoing economic boom has caused more to put their house up for sale, for fear of missing the chance to strike while the market remains hot, according to some lenders.”
“‘I think a lot of people are starting to realize that if you are going to sell something, do it before it drops,’ said Rich Wachter, of Wachter Investments in Burlingame. Homes for sale are staying on the market longer, bidding is not as competitive as it has been and inventory numbers, though low, are gradually creeping up, according to Wachter, who identified the trends as potential signs of an industry turning. ‘I just think that I see a softening in the market,’ he said.”
“Ted Yamagishi, a broker with Spinner Mortgage in San Mateo, expressed a similar sentiment. ‘The bubble is losing its air,’ he said. ‘I think it is at an all-time high.’”
The Naples Daily News in Florida. “In real estate, slowdowns require quick thinking. And that’s just what real estate agents and homebuilders are doing as Southwest Florida’s housing market rounds the curve from hot to not-so. Matt Lane, managing broker of William Raveis Realty LLC in Naples, said his firm leaves no stone unturned in its marketing. Yet one of the brokerage’s most effective tools, he said, is also one of its simplest — an emailed sheet that sorts local data into ‘changes favoring buyers’ and ‘changes favoring sellers.’ ‘Data doesn’t lie, and when a market slows, the best content to market is the facts,’ he said.”
“Fahada Saad, an agent with Premier Sotheby’s International Realty in Naples, has used creative marketing techniques over the years. But ultimately, she said, all of the promotional tools in the world can’t make up for the one thing that sells a home the quickest: A seller who sets a realistic price. ‘The market is contracting, and for what we have in our inventory now, we just need to be super sharp on pricing,’ she said.”
The Odessa American in Texas. “Odessa home sales increased modestly in April while prices continued to fall, reflecting a more balanced market, a report by the Odessa Board of Realtors found. April home sales increased 2 percent from the same month of 2015 to 115 homes sold. Median home prices fell by 3 percent to $165,000 from the same period. Meanwhile, the board reported Odessa’s monthly housing inventory climbed to 5.1 months of inventory in April, 2.3 months more than the same month of last year. The Real Estate Center at Texas A&M University considers 6.5 months of inventory a balanced market.”
“Homes spent an average 58 days on the market in April, a week longer than April 2015. In the same time frame, active listings increased 63 percent to 473. ‘Although we are seeing a slight down turn in the housing market, indicators continue to point to a more balanced market,’ Tommie McClane, president of the Odessa Board of Realtors, said in a news release.”
The Inland Valley Daily Bulletin in California. “It’s a scene out of the Great Recession: A half-built housing tract serves as a modern-day ghost town, dreams of both the developer and future residents dashed, dust accumulating, imaginary voices echoing in the unfinished structures. Except this is not 2008-09. This is today, a post-recession real estate market many describe as hot. And this is Claremont, dubbed the ‘best suburb’ in the West by Sunset magazine.”
“At Towne Avenue and Base Line Road sits more than a skeleton of what was supposed to become a 95-unit town home project on a former strawberry patch. Like abandoned projects in the desert during the Great Recession, infrastructure has been laid and the first buildings are almost complete — on the outside. In February, the council learned that construction came to a stop. Claremont Director of Community Development Brian Desatnik reported the developer — Newport Beach-based William Lyon Homes, a longtime builder with 19 other projects currently for sale in Southern California — needed 60 days to reaccess the market. With time up, Desatnik said he still hears the same in recent communication from the developer.”
“‘It was a shame,’ said Mayor Sam Pedroza. He finds it especially surprising coming from a builder so ‘well-known and established.’ He acknowledged the market maybe be oversaturated with that type of high-density product.”
