December 11, 2016

Both Developers And Sellers Will Entertain A Price Reduction

A report from News Channel 5 on Tennessee. “With 100 plus people moving to Nashville every day, a strong economy, and a vibrant city center, Music City continues to prove why it’s become the ‘it’ city. Across the nation, the housing bubble may be close to bursting. In Nashville, however, the market showed it will hold strong for years to come. ‘The bubble is not going to burst here in Nashville, I truly feel that way,’ said Broker and Co-Owner of The Re/Max Collection, Debra Beagle. ‘I think that locally we will continue to see growth even if the bubble does pop.’”

From CNBC on Maryland. “Last June, Dana Rice, a real estate agent and house flipper, was deep in the throes of a massive remodeling project. She had bought a 1938 home in an upscale neighborhood of Bethesda, Maryland, for $600,000 and intended to flip it for a hefty profit. Four months and $400,000 in construction costs later, Rice put the home on the market last weekend for $1,469,000. A million dollars of her money is at stake. While the turnout Sunday was good, there were no immediate offers. Rice, who admits to selling homes recently in the area in just a few days, said she is not worried: ‘Location and quality will always win the day. And location — did I say that already?’”

From Banker & Tradesman in Massachusetts. “Fresh off the presses, here’s more evidence of just how screwed up Greater Boston’s housing market has become. While middle-class buyers battle it out over $400,000 ’starter homes,’ some of Boston’s area’s toniest suburbs are suddenly awash with a surfeit of $2 million-and-up listings. The growing inventory of super high-end homes in Boston’s suburbs mirrors a national trend that has seen listings of unsold luxury addresses balloon.”

“Fourteen of the Boston area’s most expensive suburbs have on average well more than a year’s worth of supply of unsold, uber luxury homes. In Dover, we are looking at 2019, with 22 unsold listings over $2 million on the market and just seven sales of top-priced homes over the past year. That amounts to a more than three-year supply. Manchester-by-the-Sea stands at 29 months (17 homes on the market and just seven sold over the last year), followed by Cohasset at 27 months (23 homes on market, 10 sold) and Marblehead, 16 months (16 on market, 12 sold).”

“Local red tape only makes it harder and riskier to build, and drives up the price of land. Developers respond to these pressures by focusing on luxury housing, which bring higher returns to match the higher risks. ‘People have the tendency to demonize the greedy builder for putting up that big house,’ said Elaine Bannigan, broker owner of Pinnacle Residential Properties. ‘The greedy builder is not so greedy when you look at what they had to pay for land, pay for materials, pay for labor.’”

From Haute Living in Florida. “Much like they did one year ago, prices for luxury homes Palm Beach are skyrocketing. In Redfin’s luxury housing price index, which tracked luxury sales in more than 1,000 cities across the Unites States in the third quarter, Delray Beach in Palm Beach County capped the list. Average prices of luxury homes in Delray Beach jumped 70 percent over the past year to stand at $2.98 million. In Boca Raton, prices went up 38 percent to $2.59 million, while in West Palm Beach prices climbed 22 percent to $1.32 million.”

“Miami saw less growth with luxury prices tumbling 10 percent over the modernized houses. Buyers in Miami have more choice, and therefore, more negotiating power than residents of Palm Beach. Monica Venegas of Venegas International Group says, ‘It’s a great time for buyers to buy in Miami, as they have a small window of opportunity where both developers and sellers will entertain a price reduction from list price.’”

From KVUE in Texas. “Over the past ten years, home prices have risen higher in Austin than anywhere else in the country. The only city that comes close to Austin’s booming real estate prices is Denver. From 2006 to 2016, Austin home values increased an average 65.5 percent, according to a study of federal housing data by the American City Business Journal. Denver, coming in at second, saw housing prices increase at 45.5 percent over the past ten years.”

“Austin realtor Carl Shurr has been selling Austin-area real estate for over a decade. Compared to 2013-2015, he says the housing market in 2016 finally started to ‘normalize,’ meaning houses spent longer on the market and there were less multiple-offer sales on single-family homes. ‘It’s really been split this year, depending on the price range,’ Shurr explains. ‘The upper end of the market has really pulled back. There’s more supply, homes aren’t selling as fast. We’ve seen some pretty significant price reductions on the upper end of the market.’”