February 8, 2018

Uncertainty, Heavy Discounting In An Unforgiving Market

A report from My Twin Tiers in Pennsylvania. “A new report says Pennsylvania has some of the highest foreclosure rates in the nation. Last year, nearly 31,000 properties across the Commonwealth were foreclosed, according to ATTOM Data Solutions. Some housing agencies say part of the problem is due to predatory lending and loan scams. ‘Pennsylvania remains high, in particular, compared to other states, because of predatory lending,’ said Sam Milkes, executive director of the Pennsylvania Legal Aid Network. He says the symptoms of the housing crisis of the mid-2000’s never really went away. ‘Maybe they’re not regarding it as the same crisis anymore, but people are still losing their homes,’ said Milkes.”

The Winston-Salem Journal in North Carolina. “The Winston-Salem area ended 2017 with a slight uptick in the number of residential households considered as seriously underwater, according to a fourth-quarter report. There also was a slight dip in the number of households listed as equity rich, Attom Data Solutions said in a report timed for release today. Attom defines seriously underwater as owing at least 25 percent more on a mortgage than the property is worth.”

“The five-county region of Davidson, Davie, Forsyth, Stokes and Yadkin counties had 14,614 households listed as seriously underwater, up from 13,910 in the third quarter. The Greensboro-High Point MSA of Guilford, Randolph and Rockingham counties had 12,503 housing units, or 10 percent, listed as seriously underwater. That’s up from 9.7 percent in the third quarter and 8.9 percent a year ago.”

“Attom said the Triad is in line with the North Carolina and national trends of a slight increase in seriously underwater households and a slight decrease in equity rich households. ‘The share of homeowners with at least 20 percent equity dropped 1.1 percentage points from a year ago, while the share of homeowners with between 10 percent equity and 10 percent negative equity increased 1.1 percentage points from a year ago,’ Attom said. ‘This indicates homeowners are increasingly leveraging their equity to sell and move up into another home or by refinancing.’”

From Bizwest in Colorado. “A quick glance at average sales prices for Northern Colorado last year might make one wonder what’s up with Berthoud? After all, every local submarket in the region saw average sales prices increase. All except Berthoud, where average sales prices declined 3 percent. Most notably, total home sales in Berthoud soared from 218 in 2016 to 451 last year — a year-over-year growth rate of 107 percent. With all that demand, it seems counterintuitive that average prices would slip from $412,225 to $400,751.”

“The reason? Berthoud is a hot spot for new home construction. And because much of that new construction featured affordable options last year, average prices came down.”

From Inman News on California. “For the past several years, real estate prices in San Francisco have risen dramatically. Is there a chance that this could represent a localized real estate bubble in San Francisco? Back in 2007, right before the financial crisis, the median home sales price in San Francisco was about $900,000, with a median condo price of just under $800,000. Compare that to the national median home price, which was just over $200,000. That’s a gap of roughly $700,000.”

“Then, from 2012, the prices in San Francisco began to explode, growing consistently and significantly, year over year. For 2017, the median home sales price was a whopping $1,420,000, with a median condo price of $1,150,000. Compare that to the national median home sale price, which was $248,000 in 2017. That’s a gap of $1,172,000, meaning the gap is more than 50 percent bigger than it was pre-economic crisis.”

“There are some troubling signs, however. For starters, pending home sales in California (overall) fell for a few months in a row at the end of last year, furthering the trend of dropping pending home sales over the past few years. Real estate agents began noticing a trend of fewer floor calls, listing appointments and client presentations. The drop hasn’t affected real estate prices much so far but could be a sign of reversing momentum in the near future.”

“The problem is compounded by the fact that the Bay Area has been hemorrhaging jobs in the past few months, with September of 2017 resulting in the worst month for employment since February 2010.”

The Sangre de Cristo Chronicle in New Mexico. “Angel Fire, New Mexico, which also includes Black Lake, wrapped up the year with an overall 15 percent increase in the number of homes sold over 2016. While 15 percent may seem unimpressive when compared to the massive 48 percent spike we saw in 2016, any increase following 2016 is something to celebrate. This continual increase in buying activity over the last 2 years is moving Angel Fire from a buyers’ market to a balanced market.”

“The $500,000 to $1,000,000 home sales were down 35 percent over 2016, while over $1,000,000 home sales were up 50 percent. We also saw a slight increase in the number of homes over $500,000 entering the market. With inventory up and sales down, homes above $500,000 are currently sitting around a 3.7 year supply. The condo market saw an overall increase in units sold of 20 percent over 2016, with a 26 percent decline in sales under $90,000 and a 58 percent increase over $90,000. With the increase in inventory, condos are at a 14.6 month supply in inventory which is a Buyers’ market. History shows that this over supply will put downward pressure on condo prices this year.”

From the Real Deal on New York. “Few of the city’s residential brokerage were sorry to see 2017 close out. Why would they be? Looking back, the year was marked by buyer uncertainty, heavy discounting and unapologetic recruiting as top firms sought to maintain revenue in an unforgiving market. The stats in 2017 saw an artificial boost because many of the deals struck during 2015’s condo boom finally closed. In reality, it was a tough year for Manhattan’s residential brokerages as they grappled with a glut of expensive new developments and luxury resales lingered on the market.”

“‘Anyone who tells you it was great is lying,’ said Shaun Osher, the CEO of boutique brokerage CORE, adding that last year’s absorption was the slowest in two years. ‘It was one of the more miserable years to be a real estate agent,’ said Osher.”

“For nearly all firms, the key to closing deals in 2017 was getting sellers to reduce prices. More than 45 percent of all co-ops and condos in Manhattan sold for less than their asking price last year, according to data from appraisal firm Miller Samuel. CORE’s Osher said that for most sellers in 2017, the reality of the market correction had still not seeped in, leading to fewer trades and longer marketing time.”

“‘We definitely adjusted pricing, and that’s how we sold a lot of our inventory,’ he said, noting that agents often had to be ‘the voice of reason’ inside sellers’ heads.”

From CBS 12 in Florida. “Boynton Beach police are investigating a domestic-related shooting at a house on Aspen Leaf Drive. Officers were called to the scene at 7:11 p.m. according to police. A man and his wife suffered gunshot wounds and were taken to a local hospital. A neighbor said she was shocked to see police officers in the middle of her quiet neighborhood. ‘It’s just a white couple, they’re pretty quiet. They’ve been trying to sell their house for a long time. I don’t know if they’ve been under stress, or what’s been going on,’ Heidie Alvarado said.”

“The home listed on Zillow shows the price was just reduced to $435,000. According to the property appraiser’s office, the home, purchased in 2014, is owned by Eric and Lisa Barreca. Detectives are working to determine what led to both people getting shot. According to court records, homeowner Lisa Barreca is facing charges of attempted murder with a firearm.”