March 15, 2017

It Doesn’t Feel As Much Of A Gold Rush As It Did

A report from the Folsom Insider in California. “For probably the last 2 years, home buyers and their agents have been lamenting the fact that available housing inventory is low. It still is low, with 81 homes for sale in Folsom today, compared with 105 a year ago. The problem now is that the inventory that IS available isn’t what buyers want. Take a look at the chart above, for the past year, the average price for homes sold in Folsom has been just over $500,000, and during that time, the average home listed for sale has been $100,000 to $150,000 higher. That’s pretty significant in itself, but the pool for higher end home buyers is traditionally smaller than for more modest homes, so it stands to reason that the majority of sales are of lower to mid-priced homes.”

“In February, however, we saw a sudden spike in high-end listings, with the average home for sale in Folsom listed at $762,000. That is a huge difference from the month before, and we’re not sure why. It does raise some questions: Are the high-end home owners seeing or hearing something that tells them to sell now? Are owners of lower priced homes deciding to stay put? Are we at or near the top of the market? Or is this just a coincidental temporary spike?”

The Sun Sentinel in Florida. “Scott Agran, president of Lang Realty in Boca Raton, isn’t quite sure which way the South Florida housing market is headed. Sellers have had their say for about five years as prices continue to increase. But listings are more plentiful now, and buyers aren’t in as big a hurry as before, especially with their money doing so well on Wall Street. ‘We have a potential shift from a seller’s market to a buyer’s market, but we’re not quite there yet,’ Agran said. ‘It’s too early to call.’”

“Brian Pearl, an agent for Lang in southern Palm Beach County, said he expects active selling seasons, though rising interest rates are hurting the purchasing power for some first-time buyers. ‘It’s definitely slowed down a bit,’ Pearl said. ‘It doesn’t feel as much of a gold rush as it did two years ago.’”

The Washington Post. “Anyone who’s been house hunting in one of the Washington area’s hot neighborhoods would dispute this, but according to Zillow’s recent research into the top buyers’ and sellers’ markets across the country, the D.C. region is Number 10 on the Top 10 list of buyers’ markets. In a buyers’ market, properties tend to stay on the market longer and sellers are more likely to need to cut their asking price to attract a purchaser.”

“Among the jurisdictions Zillow identified as buyers’ markets in this region are Huntingtown, Chesapeake Beach, Indian Head, Bowie and District Heights — all in Maryland. Zillow identified Centreville, Franconia, Alexandria, Purcellville and Sterling, all in Virginia, as the top five sellers’ markets in D.C. area.”

From Crain’s Chicago Business in Illinois. “The list of high-end homes for sale in Lincoln Park just keeps getting longer, and the result, inevitably, is that prices are going lower. In February, sellers put 69 luxury houses on the market in Lincoln Park, more than during any month in the past two years, according to a report compiled by Niko Apostal, a Keller Williams broker. The new listings brought the total to 183, also a two-year high. At the same time, ’sales have remained steady,’ Apostal said, which leaves a disproportionate number of homes unsold as inventory swells.”

“The result: ‘prices are coming down,’ he said. ‘It’s natural.’ Lincoln Park homes that went under contract in February had a median asking price of just under $1.5 million, or almost 20 percent below the year-earlier figure, about $1.85 million. Their final sale prices will not be known until the transactions close. In January, closed sale prices on Lincoln Park houses were down almost 14 percent from January 2016, according to data released last month by the Chicago Association of Realtors.”

“A handsome house for sale on Montana Street recently took a price cut to below the $2.1 million that its sellers paid for the place in 2007. Listed since June at $2.1 million, it’s now asking just under $1.94 million. ‘It was time to talk turkey,’ said Jeff Lowe, the Berkshire Hathaway HomeServices KoenigRubloff Realty Group agent who represents the house at its new price. (It was previously with a different agent.) Lowe says he told the seller, ‘if you want to get it sold, you have to react to the market. The over-supply is definitely telling people to make their prices more realistic.’”

“Lincoln Park isn’t the only place where luxury homes have been lingering; the market witnessed a pronounced slowdown beginning last summer. Lakeview and Lincoln Square both have too many high-end homes for sale, too.”