June 8, 2016

Buyers’ Tightening Purse Strings

The Gazette Extra reports from Wisconsin. “‘Seller’s market’ describes what’s happening better than about anything else right now,’ said Julie Raese, a Realtor for Century 21 Affiliated in Janesville. And median home prices here rose from $115,000 to nearly $140,000 from April 2015 to April 2016, according to the snapshot data. That’s a 20 percent jump. Raese said title companies and closers are conducting 11 to 13 closings a day on average, compared to three or four years ago, when a title company would have considered two or three closings a busy day. ‘It’s been frustrating for some to find the right fit of price and house,’ Raese said. ‘And it’s changing fast enough in the past months that even appraisers can’t keep up with the (upward) price shifts. They’re going off comparable sales from just months ago, and they’re not matching up anymore. That’s a challenge.’”

The Kent Reporter in Washington. “Just as expected, the month of May had an uptick in new listings (12,272), but just as many buyers (12,275) made offers on homes during the month to keep inventory depleted, according to the latest figures from Northwest Multiple Listing Service that covers 23 counties in the state. ‘The May housing market was not just hot, it was frenzy hot,’ said J. Lennox Scott, CEO of John L. Scott Real Estate. By his analysis, 80 percent of the homes coming on the market in King and Snohomish counties are selling within the first 30 days. ‘Many sell within the first week,’ Scott said. ‘A healthy/normal market would have 30 percent selling in the first 30 days.’”

“‘There’s good news for luxury homebuyers,’ Scott said. It’s prime time to showcase such properties, he explains, and ‘this is the season when more luxury inventory hits the market. The good selection in King County is easing the pressure for homebuyers in the luxury ($1 million and above) market. A search of the MLS database shows there are more than 900 listings in King County with asking prices of $1 million or more.’”

The Winston Salem Journal in North Carolina. “Home-sale prices in the Winston-Salem area increased during April, but the growth pace continues to slow, according to a CoreLogic report. By comparison, according to the latest report from the Winston-Salem Regional Association of Realtors, the average sales price was $168,107 in November, down from $173,871 in November 2014. The association’s figures are based on numbers from the Triad Multiple Listing Service and includes selected housing markets outside Forsyth with higher-priced houses.”

“In a separate housing report, RealtyTrac said in April that the Winston-Salem MSA housing market is one of the nation’s best for buyers in terms of pricing, but not so much for sellers. The national real-estate research firm ranked the Winston-Salem area second in the nation during March for the gap between the price that sellers paid for their home and what they received in selling it. The average seller took a 10 percent loss, which trailed only the Rockford, Ill., MSA at 11 percent. The Wilmington MSA ranked fifth at a 5 percent loss.”

The Houston Chronicle in Texas. “Houston is likely becoming a renter’s market as new luxury apartments high continue to come on line while job and population growth are slower than when the ground was broken on tens of thousands of units. A midyear report seems to validate concerns forecast by economists earlier this year that Houston’s apartment market was overbuilt. Developers are expected to deliver 21,000 apartment units this year and 4,000 next year, skewed toward the high end. Concessions of up to three months free rent are already being offered. Other concessions include gift cards, Apple watches, flat-screen televisions, seven-day cruises and move-in allowances.”

“Class A apartments, representing the upper end of the market, have a 79.5 percent occupancy rate. The number of properties that have been in operation for 13 months or more have a 91 percent occupancy rate, but those open 13 months of less have a 23.2 percent rate. ‘The stark truth is that Houston doesn’t need any more Class A apartment communities, not until the market absorbs 45,000 vacant Class A units on the ground and in the pipeline,’ the GHP report states. ‘Apartment owners and developers are more likely to see crude oil hit $70 a barrel before Houston returns to a landlord’s market.’”

The Real Deal on New Jersey. “By one measure, New Jersey’s residential market is robust, as rising sales are putting a dent in inventory. Yet the price tags on some luxury homes are giving buyers pause — and spurring competition among brokerages for those home-seekers who can afford the hefty sums. ‘We feel the $2 million properties aren’t moving as fast,’ said Soha Fontaine, the broker/owner of a new RE/MAX luxury residential property office in Hoboken. The city has 40 homes listed for $2 million or above, which she believes to be a record.”

“Fontaine has observed buyers’ tightening purse strings. She recently sold a $2 million Hoboken townhouse to a couple relocating from North Carolina for a corporate job who were absolutely adamant about not going over that price point despite being able to afford much more.”

The New York Post. “When it comes to selling luxury condos these days, it seems that less is more. A sprawling triplex penthouse at One Brooklyn Bridge Park — an 11,000-square-foot expanse whose original $32 million asking price gave it the title for the priciest condominium ever listed in Brooklyn — has not only just undergone a price chop, but also a reduction in its palatial size. Originally cobbled together from nine units spanning the 10th, 11th and 12th floors of the waterfront Brooklyn Heights building, this pad now comes as an 8,333-square-foot duplex asking $23.88 million, The Post has learned.”

“The trend toward size and price cuts is playing out across the city. Of course, it’s impossible to forget the $118 million three-penthouse combination at 10 West St. in Battery Park City that ‘Million Dollar Listing New York’ star Ryan Serhant listed two years ago. At the time, the uncombined 15,434-square-foot offering was the priciest and the largest of its kind across the entire city. But about a year later, the manse saw both a price and size reduction when one of three initial sellers got cold feet; it also got a broker switch. Now, the two-unit assemblage, which spans some 11,000 square feet, is on the market for $75 million.”

“Developer Ian Schrager — who had envisioned an $80 million penthouse at his Herzog & de Meuron-designed 160 Leroy — decided to divide the digs into two smaller units with more appropriate prices. One of them, dubbed penthouse south, measures 4,849 square feet and is available for $29.5 million. Meanwhile, penthouse north runs 7,750 square feet and asks a much higher $48.5 million.”

“‘We thought it would be better for the marketplace; it’s what people were asking for,” Vector Group CEO Howard Lorber — whose subsidiary, New Valley, is a co-investor in 160 Leroy — told trade publication The Real Deal at the time. ‘Buyers said, ‘We love the top floor, but we don’t want to spend $80 million’ . . . so we figured we’d give them what they want.’”