January 29, 2018

Sellers Had To Wrestle With What Value Actually Is

A report from Gatehouse News in Massachusetts. “The low inventory of homes for sale across the Cape and Islands that has pervaded the market in the last 12 months continues to baffle even the most experienced real estate agents, who’ve seen their share of unusual cycles over the decades. ‘There’s something more than [a typical market cycle] going on and I can’t figure it out,’ said real estate agent Bob Wilkinson, an associate of Wilkinson & Associates Real Estate, in Orleans. ‘The market is not nearly as strong as it should be with such limited inventory. You’d think it would be marching off the shelves but it’s not,’ said Wilkinson, who’s been selling in the area for 40 years.”

“With inventory so low, is it a seller’s market? One might think so, but Wilkinson said there’s a dearth of buyers, too. ‘If it was a seller’s market you’d be seeing a lot more action. There are a lot of properties that have been on the market for a long time, and they are not over-priced,’ he added. ‘Other agents might say ‘no, there are a lot of buyers.’ But if that was the case we’d be getting a lot more calls to see the houses that are for sale.’”

A report from Reuters. “Sales of new U.S. single-family homes fell more than expected in December, recording their biggest drop in nearly 1-1/2 years. The Commerce Department said new home sales declined 9.3 percent to a seasonally adjusted annual rate of 625,000 units last month. The percentage decrease was the largest since August 2016. In December, there were 295,000 new homes on the market, an increase of 3.9 percent and the highest level since April 2009. The stock of new home sales still remains well below its peak during the housing market bubble. At December’s sales pace it would take 5.7 months to clear the supply of houses on the market, up from 4.9 months in November.”

A report from Curbed. “Both new and existing monthly home sales fell in December, with new home sales falling dramatically by 9.3 percent to 625,000, while existing home sales fell by 3.6 percent, to 5.57 units. Both numbers are seasonally adjusted. For new home sales, the precipitous drop was accompanies by downward revisions of the numbers from October and November as well. However, the December numbers were 14.1 percent higher compared to December of 2016.”

“According to Zillow, 2017, as a whole, saw the lowest number of new homes sold since 1992, not counting the housing bust and subsequent recovery. ‘[The new home-sales] numbers are not the way we would have liked to see 2017 end for the new home sales market,’ Zillow’s Aaron Terrazas said. ‘[2017] has proven to be a two-step-forward, one-step-back process in getting building activity to where it really needs to be. Big gains in one month are often revised down in the next.’”

“Half of the nationwide decline in existing home sales can be attributed to a whopping 22.2 percent decline in condo and co-op sales in the West, which also saw a 32.1 percent drop in homes priced at less than $100,000 and a 21.5 percent drop in homes priced from $100,000 to $250,000. The drop in sales over those price ranges extended across every region in the United States, although it was most pronounced in the West.”

The Modesto Bee in California. “It’s not just your imagination. They really are building new homes again. But it’s not like before, meaning a decade and more ago, when model homes were a common sight throughout Stanislaus County. These days, new-home construction sites are struggling to make a comeback. Most builders remain cautious, said John Beckman, CEO for the Building Industry Association of the Greater Valley. ‘It’s definitely about time,’ Beckman said of home construction picking up in spots, including Patterson, Ripon, Riverbank, Oakdale, Denair and Keyes. ‘But it’s a very risky business.’”

“John Anderson of Ripon-based J.B. Anderson Land Use Planning does work for several cities, including Riverbank, Waterford and Lathrop. He said, ‘It’s honestly nice to see some finishing lots sitting out there in Village I. But anybody who lived through this economic depression will tell you, ‘Man oh man, we’re gun shy’, Anderson added. ‘They should be. If not, they’re crazy.’”

From Greenwich Time in Connecticut. “Greenwich totaled 570 home sales worth nearly $1.5 billion in 2017. Though the number of sales in 2017 was similar to 2016, they amounted to about $204 million more, according to an analysis by Mark Pruner of Berkshire Hathaway N.E. Properties. An increase in the number of luxury sales and a strong fourth quarter contributed to that uptick, Pruner said.”

“Jonathan Miller, a real estate appraiser and consultant who produces market analysis for Douglas Elliman, referenced two key statistics in his fourth-quarter report: how long homes sat on the market before closing, and the size of listing discounts — the discrepancy between homes’ sale and most recent list prices. Miller defines the luxury market as homes with prices ranking in the top 10 percent. For Greenwich’s luxury market, it took, on average, 310 days for homes to sell, almost double from the year before, he said. The listing discount also doubled.”

“In 2016, the luxury market was ‘dormant,’ Miller said. ‘The market was devoid of significant high-end activity. Come forward a full year, sales aren’t up because the town or schools are any better. The sellers had a couple of years to wrestle with what value actually is,’ he said.”