June 9, 2016

The Urgency To Buy Has Waned

The Dallas Morning News reports from Texas. “North Texas home sales rose 10 percent in May, even in the face of a continued shortage of homes on the market. The one area of the Dallas-Fort Worth housing market that’s not growing as fast this year is sales of super high-end homes. ‘There’s lots of interest in mid-price,’ said Dr. James Gaines, chief economist with the Real Estate Center. ‘We’ve noticed higher months’ inventory for upper end — more than 12 months.’”

“Ted Wilson with Dallas housing analyst Residential Strategies Inc. said he noticed a couple of months ago that million dollar home sales weren’t growing as fast as the rest of the market. ‘Reports from builders and Realtors are that housing prices are perceived as being on the high side right now,’ Wilson said. ‘I think the luxury housing market is still vibrant, but with prices up 30 to 40 percent in the past 4 years, the urgency to buy has waned somewhat.’”

The San Francisco Chronicle in California. “More signs that the Bay Area’s overheated rental market is cooling off: At an industry conference Tuesday, two executives of major apartment owners said that increased supply is causing them to lose pricing power, although they think it will be temporary. Early this year, Equity Residential was able to sign new leases in the Bay Area at 5 percent more than expiring leases, its chief operating officer David Santee said. ‘But literally in probably three to four weeks, as we began to enter the peak leasing season, we saw that pricing power erode from 5 percent down to 1 percent where we are today.’”

“Essex, based in San Mateo, owns and operates about 60,000 units in coastal urban markets of Washington and California. CEO Michael Schall said said that Southern California and Seattle are running ahead of guidance this year but ‘Northern California has disappointed a little bit.’ The problem in Northern California is a ’supply delivery issue,’ he said. About 70 percent of the new units slated to open this year will become available in the second and third quarters. That is putting downward pressure on rents, especially in San Francisco’s South of Market neighborhood, the Peninsula and North San Jose.”

The Real Deal on Florida. “Lately, one question has permeated the minds of many in Miami’s real estate community: Is another bust on its way? At their talk in the Brickell City Centre sales gallery, market analyst Anthony Graziano gave a candid summary of Miami’s residential market — both luxury and in general. ‘2016 is going to feel like a one-legged marathon,’ he said to a room of about 80 brokers.”

“Sales are down, listing inventory is up and sellers are still reaching for ‘aspirational’ prices, which in turn is putting pressure on the market. For agents on the ground, all that means listings are likely to stay on the market for a little longer. ‘The question is ‘Are sellers going to get serious in 2016?’ he said.”

“Of the new condo buildings opening amid Miami’s recent building boom, Graziano said 20 percent to 40 percent are going right back up for sale, while an additional 20 to 40 percent are on the market for rentals. Not only will pre-construction condos have to contend for buyers amid all this existing product, but unit owners who turn to renting will go up against the roughly 4,500 rental apartments now under construction in the downtown area. ‘The bankers are getting really nervous,’ he said, referencing developers’ difficulty seeking financing for their projects.”

The Business Times in Colorado. “What’s traditionally the busiest season for real estate activity in Mesa County is off to a fast start. Unlike some areas of Colorado with what Kevin Bray, development coordinator at Bray Real Estate in Grand Junction, described as ‘overinflated’ real estate markets, the more moderate growth in Mesa County is sustainable, he said. If there’s a troubling trend in the local market, though, it’s an increase in property foreclosure activity.”

“Annette Miller, senior VP at Heritage Title Co. in Grand Junction, said 41 property foreclosure filings and 38 property foreclosure sales were reported in Mesa County in May. Compared to the same month last year, filings were down 10.9 percent, but sales were up 40.7 percent. Those numbers bring year-to-date totals for 2016 to 235 filings and 152 sales. Compared to the same span in 2015, filings have increased 19.9 percent sand sales 35.7 percent. Miller said increased foreclosure activity could be a result in part of people who’ve lost jobs in the recent slowdown in the energy sector related to low prices.”

KCWY 13 in Wyoming. “The effects of the energy downturn are hitting Wyoming residents hard with many homes for sale and some foreclosures. The housing market took a huge hit in 2008. Today Wyoming residents see signs of another slump with more houses for sale but no one buying. In the last few years. It’s been more of a ’sellers market.’ Homes were on the market for a short time. These days many homes are up for sale on the market. So sellers usually negotiate on the price.”

“‘Obviously if your in the market to buy a home now is a good time, interest rates are low, sellers are willing to deal a little bit on prices and on terms so they maybe willing provide part of your closing cost,’ said Dennis Baker as Associate Broker.”