This Is Happening Across The Entire Country
The Dallas Morning News reports from Texas. “With home prices spiking in many markets and fierce competition for houses from first-time buyers, investors are getting shoved to the side in many cities. High prices have also cut into investor profits from home rentals. Most of the slowdown has come from institutional investors that grabbed hundreds of houses in some U.S. cities. ‘All the hedge funds have gone away,’ said Don Hicks, co president of Dallas-based HomeVestors. ‘They are mostly out of the market.’”
“HomeVestors is a 20-year-old company that has franchises for investors around the country who buy and sell houses. About 800 of the company’s buys last year were in the Dallas-Fort Worth area. Hicks worries that some investors are paying ‘crazy prices.’ ‘We see average investors paying way too much for the houses they are buying,’ he said. ‘It does not look like in a short term they will have a cash flow.’”
The Real Deal on California. “For a while, it seemed like a new luxury high-rise, complete with an obligatory infinity pool and sky-high rents, was announced in Downtown Los Angeles every week. Then came the cranes. Now, Downtown’s multifamily market risks becoming oversupplied, especially on the luxury end, Steve Basham, senior market analyst at CoStar Group, said in a recent report on the submarket. The rising vacancy is hardly deterring investors. More than 10 percent of inventory — more than 2,000 units — changed hands in the past four quarters.”
“Carmel Partner’s 700-unit Eighth & Grand project, however, was only about 25 percent occupied five months after opening, with 60 percent of the available units leased while the rest of the project was being completed. ‘This [Eighth & Grand] development was highly anticipated as its ground floor is home to Downtown’s first Whole Foods, but the $3.65 [a square foot] average asking rents are near the top of the rent spectrum,’ Basham said. ‘The dense concentration of luxury development Downtown is leading to increased competition for renters, and the resulting concessions will weigh on effective rent growth.’”
“At Eighth & Grand, tenants were offered the option of two months free rent or a year of free parking at the end of the first quarter. Similar concessions are a rarity in other pockets of the L.A. market. But then again, there isn’t another pocket of L.A. seeing as much construction of high-rent properties.”
The Star News in North Carolina. “‘For Sale’ signs staked in the front yards of area luxury properties are sticking around longer as the high-end market struggles to find buyers. While the sun, sand and Cape Fear River provide plenty of incentive to purchase in the area, the luxury market in New Hanover is backed up with inventory. In the past 12 months, 86 luxury-level homes were sold in the county. To sell all of New Hanover County’s homes, Chris Livengood, Intracoastal Realty VP of sales said it would take 20 months. In Brunswick, the stock is up to 32 months (based on 90 homes on the market) and in Pender, it’s 60 months (based on 10 homes).”
“Steve Harney, founder of Keeping Current Matters, a New York-based company that tracks market trends, said in a teleconference that the problem is not unique to Wilmington. ‘I don’t want people asking, ‘What is wrong with Wilmington,’ he said. ‘There’s nothing wrong with Wilmington … This is happening across the entire country.’”
The Advocate in Louisiana. “Lafayette Parish homebuilders are feeling the financial pinch of the energy downturn, with sales of new homes from January to May this year falling significantly compared with 2015, a seasoned home seller said. ‘What we have clearly seen at this point is that demand is down,’ Bill Bacque, CEO of Lafayette real estate company Van Eaton & Romero, told members of the Acadian Home Builders Association. ‘New construction has taken the brunt of the decline.’ Why the market has hit the new home market much harder than that of existing homes, Bacque said, ‘I really don’t have a clue.’”
“Bacque said the problem is that most builders kept constructing homes that sold pretty well in the boom years — those priced $300,000 and above — and not enough of the homes that are priced in the market’s sweet spot. According to the report, homes selling for $550,000 to $599,999 have been the hardest to sell, sitting on the market for more than three years before selling.”
KTUU in Alaska. “Alaska has shed a lot of oil industry jobs in the last year, roughly 2,300 according to the State Department of Labor but the Anchorage housing market appears to be holding strong. Alaska Multiple Listing Service reports a larger inventory of homes on the market over last year, but Bob Winn with RMG Real Estate Experts says they’re selling faster. ‘The one area we’ve seen a little bit of a slowdown in is the million dollar homes,’ said Winn.”
“Michael Droege with Century 21 Realty Solutions says consumers have generally been in a panic mode, ‘While on the surface it might seem that the oil industry is melting down and the state of Alaska is going into a crisis and that we’re going to return to the 80’s that’s not likely to happen any time soon,’ said Droege. He points to the $300,000 to $450,000 market and the average sale price is down close to 1.2% but homes are still selling quickly. ‘There are some things that are changing and there are some oil executives leaving and there are some doctors coming in to replace them so it’s not all doom and gloom,’ said Droege.”
5 NBC Chicago in Illinois. “Time is running out for two federal programs designed to help homeowners who are facing foreclosure. The programs have already helped thousands of families in the Chicago area modify or refinance their mortgages, but the relief is scheduled to expire December 31. Theresa Raborn of Midlothian said she will be certainly looking into options like NHS as she fights to save her home, which also serves as a homeschool for her three daughters.”
“Raborn said she and her husband spent twelve months correcting an issue with their home’s escrow. She said since they met their obligation, the lender has put some of her recent house payments in an unapplied account, where partial payments are held until they can be applied later. Raborn said she is being unnecessarily charged late fees. ‘There was plenty of money in that unapplied (account) to make a full payment,’ Raborn said. ‘This has snowballed to the point to where we’re behind on everything.’”
“Raborn said she is spending so much time dealing with the lender, she has had to limit her homeschool teaching. She also said her family now relies on a food bank. Freedom Mortgage said it graciously accommodated its customer and responded with a viable solution when the Raborns made additional requests. However, Raborn rejected the terms, including, she said, a provision that would have required her to keep the matter private. ‘I’m willing to be open to anything that they bring before me but I will not sign away my rights to speak and to associate in order to get a resolution,’ Raborn said.”
