A Glittering Monument To Oversupply
A report from the Journal Sentinel in Wisconsin. “On a recent Friday, Shorewest Realtor Beth Jaworski listed a three-bedroom, 1½-bathroom Dutch colonial house with a single-car garage in a popular Wauwatosa neighborhood for $289,900. By Sunday night that same weekend, the house had five offers from buyers. It sold for $315,000. ‘I’ve never seen it quite like this,’ said Jaworski, who has been selling residential real estate for almost 25 years. ‘You can put a property on the market, and literally within hours, you’ll have 15 to 25 showings scheduled.’”
“That seller’s market deal in Wauwatosa — and many others like it — shows how hot the metro Milwaukee climate for existing home sales has become. ‘It’s definitely a starving market, meaning that there’s so little inventory,’ said Bob Larson, a broker First Weber Realtors. ‘I’ve been in the business quite some time and I’ve seen a lot of buyer’s markets and I’ve seen seller’s markets. I’ve never seen one quite like this.’”
The Herald Leader on Kentucky. “Did you hear the one about the woman selling a $140,000 home in Kenwick who was besieged with home hunters wanting to see her house? Or about home sellers who are getting offers before their house has shown up on the Multiple Listing Service of real estate for sale? These Anecdotes are not just being heard in Lexington. In Versailles, Realtor Jeri Hartley said that in a recent four-day period, she put three houses on the market, and they all sold in the first 12 hours. ‘They go extremely quickly,’ Hartley said. ‘There are a lot of buyers from last year, … waiting to pounce just as soon as one comes on the market.’”
“Susan Speckert, executive director of the Fayette Alliance, said Lexington’s low housing inventory is not unique. The alliance supports sustainable growth in Lexington through land-use advocacy. ‘Though this is a nationwide phenomenon, there are some who will try to use low inventory as an argument to expand our urban services boundary to build more houses,’ Speckert said via email. ‘This is an illogical argument that ignores the facts. There are over 5,600 acres of vacant land and thousands more acres of underutilized land available for development inside the urban service boundary. Lack of available land is not the cause of the current housing inventory.’”
The Stockton Record in California. “The cities of Manteca, Tracy, Lathrop and Mountain House are seeing revived homebuilding. Not Stockton. All those cities are closer to the Bay Area. So regional trends may explain the disparity. John Beckman, head of a developer’s group, says Stockton has an ‘acute’ shortage of 9,890 homes — his figure — and there’s no way to build subdivisions big enough without bringing more acreage into the city.”
“Eric Parfrey, the Sierra Club litigant, says there is no housing shortage. The city already approved 19,000 yet-to-be built homes, at least. Assuming a growth rate of 500 homes a year, that is enough for 38 years of growth, or 15 years beyond the General Plan’s 2040 horizon.”
“‘I think that there is a substantial amount of housing that can be built within the limits of Stockton as they exist now,’ said Tom Pace, Stockton’s Deputy Community Development director, ‘traditional infill — a vacant lot downtown — as well as large-scale master-planned communities annexed into the city not yet constructed.’”
The New Canaan Advertiser in Connecticut. “Anyone who follows New Canaan’s real estate market could tell you when it comes to single family homes, the $1-million to $3-million range is where most of the activity happens in town. But with signs of a strong 2017 spring market, observers have noted the year kicked off with strong January numbers in the below $1-million range. Mary Higgins, a realtor with Halstead Property in New Canaan who offered the latest figures, attributes the uptick to signs of a turn-around after a slow 2016.”
“‘There were a number of price corrections in 2016, said Higgins. Many sellers started to get a more realistic view of what their home would sell for and dropped their price. Those adjustments are paying off.”
“A realtor for 40 years (36 in New Canaan), Kathy Tanner is seeing buyers getting smarter and savvier. Instead of offering a lower bid and going through a lot of negotiations to get a better price on a house, they are waiting for the price to come down and jumping in. ‘I think people are more realistic,’ said Tanner of sellers. ‘Some of the houses were priced higher in the market last fall and they have reduced them.’”
The Miami New Times in Florida. “Miami real-estate analyst Andrew Stearns releases a report about the health of the city’s condominium market four times per year. In the past year, Stearns’ predictions for the city’s ‘preconstruction’ condo market have gone from bad to worse to, as of yesterday, apocalyptic. Stearns has warned for close to 12 months that Miami property brokers can’t sell all the new condos that developers are building. But in a new report issued yesterday, Stearns officially labels Miami’s units for sale that haven’t yet been built as ‘distressed.’”
“‘The preconstruction condo resale market will likely continue to weaken as more units are delivered into the distressed market,’ Stearns writes. ‘Building inventory and declining sales usually result in downside pricing pressure. Preconstruction condo developers, flippers, and existing condo resellers should expect pricing pressure to accelerate.’”
“Stearns includes a gulp-inducing chart in his report, which shows condo sales have slumped like a black-diamond ski slope, right as inventory has hit an all-time high. Now buildings are sitting on the market for months or years with empty units. The Crimson Miami in Edgewater, for example, is still 34 percent empty despite the fact that construction ended in December 2015. Rise at Brickell City Centre is still 54 percent empty. Construction was completed there in September 2016.”
“Brickell, which has been so rapidly infused with condo buildings postrecession that the towers now blot out the sun at ground level, seems to be getting hit the hardest in terms of unsold inventory. The neighborhood is a glittering monument to oversupply.”
“‘Developers may resort to mark-down liquidations or bulk sales of unsold condo units as the cycle progresses, and time will tell how doing so will affect the preconstruction or existing resale market,’ Stearns writes. ‘The built-in, developer-owned inventories, which are expected to increase as we get deeper into this cycle, come at a time with massive increase in existing condo inventories and slumping sales in the overall Miami-Dade condo market.’”
