January 31, 2017

The Thud Of Slowing Sales

A report from the Oregonian. “The Portland area’s rapidly rising home prices may have run out of steam in the second half of 2016. The sudden slowdown might be a sign the Portland metro area, walloped by escalating prices in recent years, has hit the outer limits of affordability. Aaron Terrazas, a senior economist at the real-estate website Zillow, said that recent months have brought a sea change in the Portland market. ‘Shoppers are becoming a little more price sensitive, even in the most expensive parts of the metro’ area, Terrazas said.”

From The Reflector in Washington. “The housing market looks to continue its slowdown, though there’s no need to fear a market catastrophe, according to one regional authority on the industry. Todd Britsch, MetroStudy regional director for the Seattle and Portland housing markets, explained that the housing market for the Portland metro appears to be slowing down in 2017 from the builders’ side, though he was optimistic that it would not turn in the direction the market did before the Great Recession. ‘We are just at a point where the market is leveling off,’ Britsch said. ‘It’s not doomsday, it’s not even 2006.’”

“Britsch mentioned feedback from news regarding tech companies moving into the Portland metro area and finding it more affordable than areas such as Silicon Valley. ‘Yes, it’s affordable if you are making California wages,’ Britsch said ‘We don’t provide California wages here, nor are we going to get to that place.’”

The South End Beacon in New York. “The thud of slowing sales at the ultra-high end brought down the South Fork’s real estate sales figures in the fourth quarter of 2016. Town & Country Real Estate CEO Judi Desiderio did not mince words about the state of the South Fork market. ‘The last three months of 2016 were NOT good for the Hamptons real estate markets,’ she said in her fourth quarter report. ‘Eleven of the 12 individual markets monitored by Town & Country experienced declines in the number of home sales, with the hardest hit being starlets East Hampton Village, with a 46 percent drop and Bridgehampton (which includes Water Mill and Sagaponack), with a whopping 56 percent free fall.’”

The Anchorage Daily News in Alaska. “Four consecutive years of rising home prices in Anchorage came to an end in 2016 as a weakened economy caused prices to stall out, according to year-end data from the Multiple Listing Service. Anita Bates, an associate broker at Dwell Realty, frequently works with sellers who are builders of new homes. She said these sellers tend to hold fast to listed prices, but have been more amenable of late to picking up a greater percentage of buyer closing costs than in the past.”

“‘In many instances, building companies have obtained a pre-construction approval from a bank and if they discount the price of the home, that jeopardizes their ability to go out and get another construction loan,’ Bates said.”

The Peoria Journal Star in Illinois. “A stagnation of high-end home sales in recent years may have been an early indicator of the impending loss of high-paying jobs in the Peoria area. ‘Interestingly enough, we do believe that some of the Caterpillar employees who are slated for a move to Chicago that do, in fact, live in the Peoria area, we believe that they may have even possibly had their homes listed for sale already,’ said Jana Heffron, president of the Peoria Area Association of Realtors. ‘That could explain some of the numbers we’ve been seeing in the high-end market.’”

“The higher-end market, which includes homes listed for $500,000 or more, has been declining as more luxury homes went up for sale and the number of interested buyers dwindled. From 2014 to 2016, the number of homes sold in that category declined by nearly 29 percent, while the average amount of time a luxury home stayed on the market stretched to 16.5 months, up from 10.2 months a year ago.”

From Curbed Miami in Florida. “Signs of a distressed preconstruction condo resale market in Miami are continuing, with StatFunding Founder Andrew Stearns’ January market report indicating ‘the number of condos with unsold developer units is increasing.’ Over the last three months, sales have fluttered as inventory swells and we should expect resale losses to continue with thousands of new units hitting the market in the coming quarters.”

“Stearns also took a snapshot of one specific condo in the 299-unit Icon Bay in Edgewater, which was completed in Summer 2015 and currently has 68 units for sale. All resales in that development profited from July 2015 to April 2016 but all nine of the most recent sales dating back to May 2016 have incurred losses, including one unit selling for 28 percent ($190,300) under the original sale price.”