June 20, 2017

Waiting For The Rescue Boat

A report from Bizwest on Colorado. “In the Boulder Valley, we are beginning to see the two largest residential market segments (in terms of price) act as two different market with two different sets of rules. On one hand, we have what I’ll call the ‘Upper Market,’ which I’m defining as homes priced at $1 million and above (which currently go up to $5,995,000). You’ll note that I’m not calling this the ‘Luxury Market,’ both because the average home in Boulder is currently over $1 million and because many of the homes in this segment would not fit the definition of ‘luxury.’ On the other hand is the ‘Lower Market,’ which is comprised of any homes below $1 million. While the Boulder Valley is generally described as being in a seller’s market, the Upper Market shows strong signs of being a buyer’s market.”

“As of the close of the first quarter, there were 11.3 months’ of inventory in the Upper Market. If you are a buyer in the Upper Market, it means you likely have a little more time to consider your options and are more likely to be able to buy a home for less than its asking price.”

From Maui Now in Hawaii. “Maui Now sat down with realtor Lee Potts of Aloha Group Maui and KW Island Living to discuss the current Maui real estate market. Maui Now: Is the current Maui market a buyers or sellers market?”

“Lee Potts: If you go to homes that are for sale over $700K, there were 48 sales last month and there’s 405 homes for sale above $700K. That’s enough inventory to last for over eight and a half months, that makes it more of a buyers market. If you jump up a little higher, which is not uncommon here on Maui, to $1.5 million there were only 15 sales but we have 215 homes for sale so that very much is a buyers market above $1.5 million.”

The Greensboro Reflector in North Carolina. “Current data indicates that the supply is dwindling in lower to mid-price ranges, good news for those sellers, but increasing as prices increase, according to data supplied by Mike Aldridge of Aldridge and Southerland Realtors. ‘There’s only a one month supply of houses between $100,000 and $150,000 and a three-month supply of houses between $155,000 and $175,000,’ Aldridge said. ‘It only reaches a balanced supply when the price reaches $250,000 to $350,000. Really, anything below $400,000 is looking really good for sellers.’ Above that price, supplies increase between 12-24 months, Aldridge’s data indicated.”

“Home prices are adjusting upward somewhat but not yet to pre-recession levels, Charles Manning, president of the Greenville-Pitt Association of Realtors acknowledged. ‘People who have been sitting on the (selling) fence now are hearing that the market is picking up and they’re beginning to feel like they’d better get their home on the market,’ Manning said. ‘A great many are still upside down (a condition where the equity value of a property is less than the outstanding loan balance) and they can’t sell. That explains some of the current financing issues some people are facing.’”

The Killeen Daily Herald in Texas. “Almost 67 percent of all new foreclosures in Bell County in 2016 were tied to the Veterans Affairs home loan, a federally guaranteed, zero percent down mortgage for qualified veterans and active-duty soldiers. Due to the favorable terms of the loans — more than 57 percent of new purchasers in the Fort Hood area market used one in 2016 — service members, often unknowingly, take on a Catch-22 loan in looking for a way to grow their wealth.”

“Brian Adams, a real-estate agent with StarPointe Realty in Killeen said the Fort Hood area market is unique due to a high number of foreclosures on Veterans Affairs home loans. ‘Because of the 100 percent financing and the fact that most buyers finance the VA funding fee into the loan, it literally means that buyers with the VA loan are underwater from Day 1, usually by a few thousand dollars,’ Adams said. ‘Many soldiers’ financial situations change, they find that they bought more house than they could keep up with, and find that they can’t sell it without bringing a lot of money to the table.’”

From Mansion Global on Florida. “Both developers and buyers are taking a wait-and-see approach to the launch of new developments in Miami. For developments that have broken ground and are moving forward, between 60% and 100% of the units have been sold, said Edgardo Defortuna, CEO of Fortune International Group, a real estate development. For Miami projects that have launched sales but not broken ground, ’sales are slow, with few exceptions,’ he said. ‘They’re waiting for the rescue boat to come in and lift them out of the water,’ Mr. Defortuna said.”

The Real Deal on New York. “On this week’s episode of ‘Million Dollar Listing New York,’ our three heroes give us an exercise in stress management. With 25 Mercer in the rearview mirror, Fredrik is reaching for new heights — literally — at 45 West 22nd Street, an 83-unit condo tower in the Flatiron District. He’s beckoned by the building’s developer, Bruce Eichner, who bestows on him $400 million in unsold listings.”

“Though it doesn’t seem like Lorber is especially ecstatic when he finds out Fredrik has agreed to Eichner’s pricing structure. Perhaps he should have said no and ran for the hills? Nevertheless, Fredrik embarks on his quest to make Papa Lorber proud. He focuses on selling the $20 million apartment before he pushes the pricier units on the higher floors. Lorber unexpectedly turns up during the sales soiree, and reminds Fredrik of all those ridiculously priced pads that he needed to sell, like yesterday. This tower may too tall for even Fredrik to climb.”

“Shortly after the first home sells, Ryan meets with David, the seller of the 17-foot-wide townhouse, to convince him lower the asking price. He uses the $9.47 million townhouse — yep, the one that ruffled David’s feathers last episode — as a comp for the neighborhood. Even if the current price is a bit high, he should’ve known this would upset David, seeing as he was bothered by Ryan talking a similar listing on the same street. But rather than budging on the asking price, David decides to take the townhouse off the market.”

“‘That’s not reducing the price — that’s the opposite,’ Ryan says. ‘Now there’s no price!’”