The Housing Bubble

The Greeley Tribune reports from Colorado. “Weld County housing prices hit another milestone in May as the median sales price for the county shot up over the $250,000 landmark. During the past two years, the median price for single-family homes has risen 50.5 percent, from $172,700 to $260,000. But as housing prices continue to climb across the Front Range, wages remain stagnant, posing the question of affordability for those who live in the area. Mike Ramstack, a longtime broker and owner of Pro Realty, said he is nervous another housing bubble burst is on its way because people won’t be able to afford their homes. ‘I think we’re heading toward a big correction,’ he said. ‘We have people moving into the area, but from what I can see, wages haven’t risen that much to offset the increase in prices.’”

“Having so little inventory, or available houses, is causing a lot of the problem. He said some people are bidding $15,000-$20,000 more than the asking price and they’re still not getting the house. ‘People are getting what I call ‘auction fever,’ Ramstack said. ‘They’ve got to get it, and they overbid.’”

The News & Observer in North Carolina. “Triangle home sales rose 10 percent in May compared with the same period a year ago. The inventory shortage is particularly acute for homes priced under $300,000, as rising land costs have made it difficult for homebuilders to offer new product priced in that range. ‘It’s insane,’ said Van Fletcher, a real estate agent with Allen Tate, who has sold or put under contract 48 homes this year. ‘Every single one that I’ve put under contract, whether I represent the buyer or seller, is a multiple offer.’”

“Stacey Anfindsen, a Cary appraiser who analyzes MLS data, said the Triangle remains very much a bifurcated market. While demand is far outstripping supply at lower price points, it’s a different story at the upper end of the market. Sellers above $500,000 in many areas of the Triangle are having a much harder time selling their home. Anfindsen said a wave of new construction in the Falls Lake area is expected to make it even more challenging. ‘The re-sale market for $700,000 to $800,000 and above is going to get worse in the next six months to a year because there’s really nothing they can do to compete with new construction but lower the price,’ he said.”

The Naples Daily News in Florida. “A flood of new supply cooled sales of existing homes in the Naples area in May, though prices continued to inch forward. A report by the Naples Area Board of Realtors comparing May to the same month a year earlier showed inventory levels of resale homes and condos jumped 37 percent, to 5,207 from 3,800. That’s a boon to buyers, said Jeff Jones, managing broker at the Naples-Park Shore office of Coldwell Banker, in the report. ‘As more properties come on the market, buyers will have more options and won’t be forced to make aggressive offers,’ he noted.”

“Supply grew by more than 50 percent in the $1 million-and-above price range. But those who have been most squeezed by the housing shortage — buyers in the $300,000-and-below range — also found some relief. Supply in that segment jumped 29 percent in May over the year, to 1,391 from 1,076. Single-family home supply jumped 27 percent, to 2,744 from 2,168, while condo inventory increased 51 percent, to 2,463 from 1,632. With more to choose from and less pressure to buy immediately, the frantic pace of sales of last year has abated. Following a downward trend that began during season, overall closed sales dropped 17 percent, to 838 from 1,010.”

“‘The properties that are selling now are homes by owners who have priced their homes realistically,’ said Brenda Fioretti, managing broker at Berkshire Hathaway Home Services Florida Realty, in the report.”

Richmond Biz Sense in Virginia. “After dodging a foreclosure auction and weeks of negotiations with would-be residents, the developer of a stalled West End condo project has entered Chapter 11 bankruptcy. Tiber Partners LLC, the embattled ownership group behind the delayed Tiber condos at Libbie and Guthrie avenues, was ordered to enter bankruptcy protection. The ruling comes less than two months after three couples who put down deposits to purchase condos at the stalled development sought to force Tiber Partners into Chapter 7 bankruptcy.”

“In 2013, George’s John K. George & Company broke ground on the 15-unit condo development with units ranging from $575,000 to $1.2 million. Planned to be delivered to residents in 2015, the project remains unfinished with the delays coming to a head when John K. George & Co. and Tiber’s developers argued in court over completion of the project. While they traded allegations in court, people who put down deposits on the unfinished condos filed liens and lawsuits of their own.”

The Forum News Service on North Dakota. “Residential lots that Halliburton purchased for employee housing in Williston will soon be auctioned off to the highest bidder. The oilfield service company is selling 21 residential lots in Williston’s Harvest Hills neighborhood through a live auction June 30. The residential lots, as well as two commercial lots in Williston, will sell without a minimum bid, said Fontana Fitzwilson, executive VP of sales for Williams and Williams Real Estate Auctions, which is handling the sale. ‘They want buyers to know they’re committed to selling these,’ Fitzwilson said.”

“New home construction in Williston has significantly slowed with the drop in oil prices. Williston had issued four building permits for single family homes this year, according to numbers updated through the end of May. In 2015, Williston issued 76 building permits for new homes, the lowest number in six years. Williams County listed the value of the residential lots as between $50,000 and $70,000 in 2015.”

The Calaveras Enterprise in California. “Oak Canyon Ranch near Copperopolis, once planned as the largest golf course resort and housing development in Calaveras County, will instead remain as grazing land and could soon be permanently preserved through a conservation easement. The Calaveras County Board of Supervisors opened the door for that conservation easement by voting unanimously to give its blessing to the proposal. At a later date, the board will also have to rescind the development plans that were approved in 2003 for the 3,171-acre ranch.”

“The board acted at the request of members of the Airola family, who have leased the land and raised cattle on it for 60 years. Airola and his wife Deloris, 58, said that the family suffered through some glum years after the massive development was approved, never knowing when their lease might be canceled so that bulldozers could move in and construction begin. But larger market forces kept that from happening. After the housing crash of 2008, the demand for golf course homes in the Mother Lode stalled. Land prices came down until, last year, the Airolas were able to purchase the land.”

“Bill Airola is now retired from his veterinary practice, so he and Deloris have the time to run the ranch with a little help from their four sons. ‘Ever since we’ve been able to purchase it, it has been like a dream come true,’ Bill Airola said. ‘I have to pinch myself every once in a while about this.’”

“The project approved in 2003 would have allowed two golf courses, 2,675 single-family homes and a village center with a 300,000-square-foot commercial area, including 1,200 apartments and an 800-room hotel. ‘Unfortunately, the timing was not good for this project and it went belly-up,’ said Planning Director Peter Maurer. ‘The property owners have no intention of developing the property. This will continue the productive use of that property as a cattle-ranching operation.’”