A Clear Picture As To Why Sales And Prices Are Hurting
The Real Deal reports from Florida. “Miami’s housing market is now facing what amounts to a giant reality check, according to the newly released Elliman reports, as its overheated pace of sales falls like a ton of bricks to more moderate — albeit less sexy — levels. While the market as a whole is downshifting into a more sustainable place, the luxury sector is starting to get volatile. On the coastal mainland, prices for both condos and houses in the luxe sector — defined as the upper 10 percent of all sales — fell significantly. The median sales price for a luxury condo plummeted 16.7 percent to $1 million per unit. Single-family home prices in the upper echelon also dropped 4.9 percent to $1.25 million. Sales were also down on both fronts. Luxury condos saw 231 sales, down 13 percent year-over-year, while single-family homes saw 211 sales, down 10 percent.”
“One look at the inventory numbers paints a clear picture as to why sales and prices are hurting: There were 3,103 condos of the million-dollar variety actively for sale during the second quarter, up a whopping 78 percent year-over-year. Houses fared a bit better with 1,124 homes on the market, marking an inventory increase of 28 percent. ‘Inventories are clearly rising and rising. The increases are much more pronounced as you move up in price,’ said Jonathan Miller, president and CEO of Miller Samuel Inc., based in New York. ‘We’re seeing the same thing in New York, where the housing market is generally softer on top than anywhere else.’”
Reuters on New York. “Overall sales plunged by about half and home prices fell sharply in the second quarter in the toniest enclaves of the Hamptons, New York’s weekend haunt for the wealthy. Total sales volume in East Hampton fell 53 percent from a year ago to $44.7 million as the median sale price fell 54 percent to $2.38 million, according to realtor Town & Country Real Estate. In Southampton, total sales fell 48 percent from the second quarter of 2015 to $45.3 million, with the median sale price falling 21 percent to $1.65 million, data showed.”
“Only 12 homes were sold in East Hampton and 17 in larger Southampton, due to a lack of inventory and because sales typically lag when the stock market underperforms, said Judi Desiderio, chief executive at Town & Country. ‘This is just a shift of the needle that I expected because 2014 was a high cycle for the high end,’” said Desiderio, who says luxury home sales in the Hamptons run in seven-year cycles.”
From Multi-Housing News. “‘These are heady times for commercial real estate,’ began UCLA Anderson Forecast senior economist David Shulman in his latest monthly letter about real estate. He ticked off the reasons: cheap money, low levels of new construction (except for apartments), and only modestly improving demand. As a result, CRE values have more than doubled from their financial-crisis lows of 2009. Heady indeed. On the other hand, hints of a slowdown loom.”
“As for apartments, the darling of the recovery, the sector might soon prove to be top-heavy with high-end units. ‘Apartment owners may soon discover there might not be enough tenants to support $3,500-a-month rent for one-bedroom units,’ Shulman said. ‘The apartment business now appears to be in transition from great to good.’”
From Houston Public Media in Texas. “Houston is still one of the fast growing cities in America. To keep pace, real estate developers have been building a lot of new luxury apartments. However, as the economy has slowed, it has begun to affect the rental market. Luxury – or Class A – apartments have been most affected by the economic downturn. Nadia Balint with Rent Café – a national apartment listing service and research firm, says it’s simple supply and demand. Almost 90 percent of the 15,000 apartments built last year, she says, were considered Class A units. This supply, along with a suffering energy sector are giving renters more buying power.”
“‘With the drop in energy prices we saw an immediate and sharp decline in rent growth, beginning in May last year. And this, in combination with the large supply that’s on the market right now, this is causing a visible slowdown in rent prices,’ said Balint. ‘Considering that we’re going to have such a huge supply of new apartments on the market that might drag down even the low end apartment prices,’ she says.”
“According to the Greater Houston Partnership, developers are scheduled to deliver 25,000 new apartments by the end of 2017.”
KRON 4 in California. “The cost of living in the Bay Area is one of the highest across the country. But a new report out shows those prices are dropping. At least three local cities made the top 10 list because of how much rent has dropped. San Francisco actually made the list, as well as Oakland and San Jose. A new report by ABODO shows rent has decreased in the last month. Oakland had the highest percentage of the three cities that made the list, coming in at 11 percent. The average rent in June was about $3,813 in Oakland. In July, it dropped to $3,400.”
“In San Jose, rent went down 8 percent in the last month. And in San Francisco, it decreased from just over $3,900 to $3,700. But in the last year, some people have seen drastic increases in rent. Chris Lee’s landlord raised her rent more than 40 percent from $3,200 to $4,500 at the beginning of the year. Although her apartment is close to work, the cost is starting to take a toll. ‘I would love to stay, but I’m also thinking of moving out of the city,’ Lee said.”
From Las Vegas Now in Nevada. “From fires to vandalism and also safety concerns, vacant properties in the Las Vegas valley continue to house squatters and the problems that come with them. Take a drive around the valley and you will likely spot a vacant home as the area continues to recover from the housing market bust. Those homes are easy targets for people looking for shelter. ‘Squatters could move in,’ said Vicki Ozuna, a code enforcement supervisor for the city of Las Vegas. “A lot of the time, they’ll steal power from the neighboring properties.’”
“So far this year, Metro has responded to more than 2,700 squatter calls for service which is up about 32 percent from 2015. ‘It’s surprising because everybody thinks that the recession is over but we still have a large inventory of vacant properties,’ Ozuna said.”
