March 19, 2017

Too Many Expensive Houses That Just Aren’t Selling

A report from the Commercial Appeal in Tennessee. “Among cities where at least 250 homes were flipped last year, Memphis ranks No. 1 for the portion — 11.7 percent — of all metro area home sales that involved a flip. Thomas Byrd generally sees house flipping as bad for Memphis. Flips and out-of-town investors inflate the price of houses for working Memphis families, which helps keep them in rental housing, said Byrd, a broker with ERA Legacy Realty who heads the local chapter of black real estate agents. ‘In some cases you may see a house in Frayser and you look for comps and you see it’s $124,000,’ Byrd said. ‘And you say, ‘Whoa, where did that price come from?’ You see the same agent working the deal and he may be selling it to somebody in California or Australia.’”

The Orange County Register in Florida. “Southern California isn’t exactly flipping over real estate. New data from Attom shows flips were on the upswing nationally in 2016 while declining locally. ‘Many local flippers are being priced out of the Southern California market and are either going further inland or to other states to flip, or not flipping at all,’ Attom’s Daren Blomquist says. ‘One flipper I talked to in Norwalk who has been doing this for 25 years said he has completely stopped buying and even compared the market to what he was seeing in 2008.’”

From Space Coast Daily in Florida. “There are now 247 single-family homes, condos and town homes built in 2017 for sale in Brevard County, according to the Last year, 233 properties sold that were built in 2016. ‘New home sales have continued to be strong for Adams Homes across the Southeast. Although hard cost increases have pushed home prices up, historically low interest rates have kept buyer excitement high’ says Elizabeth Porter, Regional Manager for Adams Homes. ‘Adams Homes has made a strong investment in lots to prepare for continued growth and we’re optimistic about the future.’”

The Greensboro News and Review in North Carolina. “The irony is rich. Residents incorporated northwest Guilford County’s three towns — Oak Ridge, Stokesdale and Summerfield — from 1989 through 1999 as protection from Greensboro’s annexation and the taxes and eventual crowding that come with that. But now Summerfield finds its quiet way of life challenged from, of all places, within. Some Realtors and residents say the town has too many expensive houses that just aren’t selling. Their solution: a new type of zoning called Planned Development that would allow developers to build less expensive, more concentrated housing on large tracts.”

“Churchill Brown has lived here for 17 years. The SunTrust real estate banker says he has no vested interest in any development. Still, as a homeowner he understands the need — the town is filled with mostly expensive homes. Summerfield has scores of smaller, older houses in subdivisions built before the town incorporated, but new construction has kept the median home price high — $336,000 in 2014, according to officials.”

“‘Ultimately what happens over time, if people want to make a move, they lose money,’ Brown said. ‘I’ve seen it play out on my street.’”

“Veteran Greensboro real estate executive Betty Smith said there’s simply an oversupply of big lots. Statistics show hundreds of large lots and houses are going unsold in northwestern Guilford County. In Summerfield, Stokesdale and Oak Ridge, up to 1,900 developed and undeveloped lots were available in January, according to research provided by Smith. That research shows the average new home price in the Summerfield/Oak Ridge area was $528,973 and $392,336 in the Stokesdale area. ‘We have a large number of lots already on the ground and there’s not a lot of buyers,’ she said.”

From The Real Deal on New York. “From name dropping to price chopping. One of the biggest price reductions in the city’s luxury market last week was a West Village townhouse that boasts an impressive guest list. In total, 12 properties asking more than $10 million received price reductions greater than 5 percent in the period between Monday March 6 through Tuesday, March 14, according to data from StreetEasy. The nearly 5,900-square-foot penthouse at Zeckendorf Development’s 50 UN Plaza hit the market in December, asking $25.25 million. Last week, $5.3 million was shaved off the price tag, a discount of 21 percent.”

“215 Sullivan Street: This six-bedroom, seven bathroom townhouse at Broad Street Development’s condo conversion sold for $17.4 million in March last year. The buyer, who used an LLC, is hoping to make some quick cash — and put it back on the market for $22.5 million in December. Last week, the seller downgraded expectations and dropped the price by 11 percent. It’s now on the market for $20 million.”