Some Aren’t Worth What Buyers Are Offering To Pay
WFAA reports from Texas. “North Texas is home to one of the hottest housing markets in the country. Real estate agent Beth Groenewald, says if you’re looking in this market, you either buy it or say goodbye to it. ‘Jump on it, because it is not going to be here five minutes from now. It’s gone,’ she said. ‘You don’t have to love it; just like it.’ Demand is crazy, and home sale stories like this one told by Groenewald are becoming common: ‘It went on the market Friday night, and I had four offers in my inbox Saturday before 8 a.m. — and we hadn’t had any showings.’”
“New homes are being erected here at the fastest pace in almost a decade. Added together, builders here are on track to put up about 29,000 new homes in the area this year alone. ‘I like having this much demand,’ said Kevin Egan, president of American Legend Homes. Egan’s company is actually turning away some homebuyers there just to pace themselves. ‘Our sales people don’t like it,’ he said, but undoubtedly they do like that as demand and prices go up.”
The Columbus Dispatch in Ohio. “A growing number of deals in central Ohio’s high-flying housing market are being shot down by appraisers. In their reports to lenders, appraisers are concluding that some homes simply aren’t worth what buyers are offering to pay. The findings are forcing deals to be renegotiated and, in some cases, killed. Agents and others say they started noticing problems a year or so ago as central Ohio’s housing market fired up, with homes selling above asking price in a day or two, sometimes in bidding wars.”
“Lenders and appraisers acknowledge that determining value can be difficult in a rapidly changing market, but they say there are ways to account for rising prices. ‘It’s such a dynamic market, if you hold onto just the historic data, you stand a good stand of missing the market,’ said Scott Robinson, a North Carolina appraiser who is president of the Appraisal Institute, a Chicago-based trade association.”
“They also can adjust for the sale date of the comps. ‘Let’s say home prices have gone up 12 percent a year, so if you have a house that sold three months ago, that’s a 3 percent adjustment,’ said Ralph Berger, owner of R.F. Berger & Associates appraisal firm and chairman of Columbus Realtors appraisal committee. ‘Our job is to reflect the market.’”
The Greater Baton Rouge Business Report in Louisiana. “Decreased demand for the high-quality pine timber that is so abundant in south Louisiana is causing a hardship for the area’s timber farmers. Behind the decreased demand for timber is a slowdown in the housing market. Though new home construction has recovered somewhat in recent years from the recession of 2008 and 2009, housing starts are still half of what they were before the recession.”
“The problem has gotten so bad Warren Peters, owner of Peters Forest Resources, and other industry leaders met last week to brainstorm potential solutions to help timber farmers. Buck Vandersteen, executive director of the Louisiana Forestry Association led the meeting and says there aren’t any immediate answers. ‘Ideally, what we need is another mill that could take some of this product,’ Vandersteen says. ‘But there’s not demand for another mill right now. You can’t encourage someone to build something when there’s an oversupply.’”
The Washington Post. “The law of supply and demand generally dictates that when the supply of a resource is low and demand is high, the price will be high. That’s not the case in the D.C. region’s housing market where inventory is tight and sales are up, yet prices are down. Even though sales volume has been higher in each of the past eight months, the median price has fallen in six of those months.”
“Arlington County was among the jurisdictions that suffered declines. Its median price dropped to $535,000, from $560,000. The median price in Frederick County, Md., fell to $270,990, from $281,000. Fairfax City and Falls Church City each saw steep declines in their median prices, but their low number of sales tends to exaggerate price swings. Fairfax City’s median price plummeted to $400,000 from $520,500. Falls Church City’s median price tumbled to $625,000, from $708,750.”
The Aspen Times in Colorado. “Property sales in Aspen continue to slump this year. That’s according to the city’s most recent tax report issued last week. In May, the city’s collection of real estate transfer taxes were down 53 percent for the affordable-housing segment and 52 percent for the Wheeler Opera House portion. In his monthly newsletter issued last week, broker Tim Estin noted that the first five months of this year mark the ‘third-worst performing period’ in the past 10 years in the Aspen-Snowmass real estate market.”
“‘Savvy sellers might consider getting ahead of this dismal news and price with a reality-based mentality,’ Estin reported. ‘Buyers may wish to consider the opportunity here to enter the Aspen market finding better values than last year. The summer selling season will let us know.’”
The Jacksonville Business Journal in Florida. “Lender-mediated residential properties accounted for 17 percent of sales in May, according to the Northeast Florida Association of Realtors. The association highlighted this fact in its monthly report on home sales in the area, but noted that bank-owned properties are playing ‘a sharply reduced role’ in the housing market with the remaining lender-mediated properties accounting for 8.7 percent of listings.”
“Jon Singleton, a Jacksonville Realtor with about 15 years of experience in the area, said that after the economic crash in 2007, the number of bank-owned properties ballooned. Singleton said that while the number of bank-owned properties is lower than in years past, there’s still a large ’shadow inventory’ owned by banks that isn’t being actively sold. He said that while the shadow inventory worries a lot of residential real estate professionals, the number of distressed properties sold off last month is a good sign. ‘That’s a much more balanced number than we have had in years past,’ he said.”
