Thinking There’s A New Market Dynamic
A report from the Sauk Prairie in Wisconsin. “Kirkland Kettleson, Realtor/Broker with Century 21 in Wisconsin Dells, said 2017 was a sellers’ market and 2018 should be the same. ‘If you were selling a home (in 2017), you were able to get top dollar and have your home sell in a very short time,’ Kettleson said. ‘Because inventory was low, there were a lot of multiple-offer situations and bidding wars. It used to be that new homebuyers spent an average of $150,000 on their first homes. Now a lot are spending upwards of $250,000 because it’s been hard to get what they want.’”
“Prairie du Sac Village Administrator Alan Wildman said new development is happening much slower than it has in the past, mainly due to the high cost of materials, lack of workforce and high cost of land. ‘The question now is the cost,’ Wildman said. ‘There is land available, but the prices are a challenge for developers. It becomes a question of at what point can residents in our area still afford the price of a new home?’”
“In Sauk City, the problem is also availability of land. ‘Development has been fairly slow because we are landlocked,’ Sauk City Village Board President James Anderson said.”
The Washington Post. “From the perspective of a real estate investor, I continue to grow ever more concerned about the long-term viability of the Washington-area housing market. How much higher can housing prices go? The median home price is equal to more than seven and a half years of income for the median household. Experts used to recommend that you spend no more than two and a half times your annual income on your home purchase.”
“Granted, it may not be the perfect measure, but how many times have you asked or have you heard someone else ask: ‘Who can afford these houses?’ It sure feels like homes are becoming unaffordable, especially for that critical middle-market buyer. The problem with housing prices, or really any kind of overvalued asset, is that the run always seems to last longer than mathematically justifiable. They persist until people are fooled into thinking there’s a new market dynamic.”
“Another red flag for this market: Private money is flowing freely again. The lenders are coming out again in force. Every bubble market I’ve witnessed comes with a sense that anyone can make money in the market. Remember the stock market of the late 1990s? Remember how everyone was a trader? New flippers and landlords are joining the market at an incredible rate.”
From Reston Now in Virginia. “It was an interesting year in Reston real estate. Overall more than 1200 properties traded hands accounting for more than $572M in volume. These numbers sound great but they represent a third straight year of declines in average home prices. While home prices were somewhat flat, demand was strong and housing inventory was low, an equation which would typically trend towards a Seller’s Market.”
“However, intense price sensitivity kept the market fairly balanced with well-informed buyers not being willing to pay more just because there were so few. The attitude seemed to be, ‘if not this one, I’ll get the next one.’ Given that prices haven’t been moving much it’s up to sellers to create motivation in the buyers by presenting the very best option possible in the price category in which they’re competing.”
From Fauquier Now in Virginia. “A four-bedroom home on 50 acres near Hume sold last week for $1.12 million. Built in 2005, the Keyser Road home features five full bathrooms, two half-baths, a large deck, formal gardens, fenced pastures and a barn. The property went on the market in April 2014 with an asking price of $1.35 million, according to Zillow.”
“The Marshall District sale tops the latest list of Fauquier property transfers. However, a Scott District property, valued at more than $4 million, went into foreclosure last week.”
The Herald Tribune in Florida. “For the second straight month, more Southwest Florida homeowners struggled to pay their mortgages on time. The jump in the mortgage delinquency rate was not an omen of new weakness in the housing market but the temporary effects of Hurricane Irma, analysts say.”
“In the Sarasota-Manatee region, 6.3 percent of mortgages were at least 30 days overdue in October, up from 4.9 percent in September and from 4.2 percent one year earlier, data provider CoreLogic said. Charlotte County posted a 6.5 percent mortgage delinquency rate, higher than the 4.9 percent the month before and 4.1 percent last year.”
“Wth the new spike in late payments, Charlotte ranked 97th and Sarasota-Manatee 104th for delinquency rates among the 381 U.S. metro areas studied by CoreLogic. That marks a big jump from the 204th and 205th rankings in September. Statewide, the 30-day delinquent rate surged to 9.7 percent in October, the highest rate in the nation. It was 7.5 percent in September and 6.4 percent a year ago.”
“Early stage delinquencies had ticked up nationwide in September, reflecting the effects of the hurricanes in Florida, Texas and Puerto Rico, but that effect has faded, said Frank Nothaft, chief economist for CoreLogic. ‘While the national impact is waning, the local impact remains,’ he said. ‘Some Florida markets continue to see increases in early stage delinquency transition rates in October, reaching 5 percent, on average, in Miami, Orlando, Tampa, Naples and Cape Coral.’”
From AM New York. “New York City homeowners received a total of 12,072 lis pendens notices — filings that begin the foreclosure process — in 2017, which is a 4 percent drop from 2016, a new report shows. Still, the analysis released Tuesday by PropertyShark, a real estate analytics company, noted that the number of homes scheduled for an auction — 3,306 — increased 58 percent from 2016 to 2017.”
“‘The foreclosure auction is at the end of the very long period of the foreclosure process, so these have been in foreclosure and there has been some modicum of trying to get them out…,’ said Susan Ifill, chief executive officer for the Neighborhood Housing Services of New York City, which helps residents buy, maintain and stay in their homes. ‘So we don’t consider those new.’”
“Ifill said many banks and lending institutions are just getting around to foreclosing on homes, where homeowners may have been struggling for some time. ‘The lender wasn’t actually moving the case to completion because they weren’t really set up or did not want to deal with acquiring large amounts of foreclosed homes all at once. Now that property values have increased so much in New York City in pretty much every neighborhood, you’re starting to see an increased willingness to take on some of these properties,’ said Caroline Nagy, deputy director for policy and research at the Center for NYC Neighborhoods, which does mortgage prevention work.”
“PropertyShark noted that Staten Island had 428 first-time foreclosure auctions scheduled in 2017, which was a 134 percent increase from 2016. Ifill hypothesized that the many residents in the borough were dealing with complications stemming from superstorm Sandy in 2012. The number of new foreclosure auctions in Brooklyn in 2017 hit 827, nearly double what it was in 2016, according to PropertyShark. And the number of auctions in Queens rose 40 percent, with the Bronx seeing a 44 percent increase.”
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