May 29, 2018

Some Folks Are Getting Into Homes They Couldn’t Afford

A report from Mansion Global on New Mexico. “Santa Fe is now the ‘hottest second-home market’ in the world, according to ‘Luxury Defined,’ Christie’s annual analysis of global luxury residential housing dynamics, which was released earlier this month. ‘New Mexico’s capital city of Santa Fe posted luxury sales volume levels not seen since 2005-2006,’ according to the report. ‘We have a very large second home market—that is a big focus here,’ said Darlene Streit, an agent with Sotheby’s International Realty in Santa Fe. ‘Lately we have been seeing a lot of people coming from Colorado as well as our usual markets of Texas and California,’ she said. ‘We’re also seeing a lot more New Yorkers.’”

“Ms. Streit defined the Santa Fe luxury market as ‘over $1 million, some would say over $1.5 million.’ There are no hard numbers on how much of the luxury market is second-home buyers. ‘I would say it’s more than half,’ Ms. Streit said. The overall Santa Fe luxury market is doing quite well, said Stephanie Duran, an agent with Barker Realty/Christie’s International Real Estate based in Santa Fe. ‘Two years ago, in the $2 million-plus price range, we had no more than five homes sold within the city limits,’ she said. ‘Last year, we had 20.’”

From Fortune. “For decades, it’s been part of the American dream: owning a vacation home, a lakeside or mountain getaway somewhere for the family to escape to on weekends or for a week or two in summer. And with the country enjoying strong economic growth, a healthy stock market, and relatively low mortgage rates, you might think beach houses and country cabins would be especially hot commodities today.”

“But all is not well in Holiday Village. ‘Vacation-home sales have been relatively weak for the last four or five years,’ says Aaron Terrazas, senior economist for Zillow. Demand is being stalled by a traffic jam of different trends—ranging from climate change to demographics to, of all things, the Trump tax reforms. Year-over-year price changes in many second-home markets have dipped into negative territory, and some experts think that trend could go national over the next couple of years—making many buyers think twice about a real estate investment that people used to count on for both fun and profit.”

“There were only 721,000 vacation-home sales transactions that year, a 36% drop from 2014.”

From the Detroit Free Press in Michigan. “In 2016, Fritz McGirr and Shahar Josef-Ben began searching for a home in Detroit. After Josef-Ben graduated and took a job in the city, the couple decided the idea of buying a home seemed more practical. So they did. They put the house back on the market when Josef-Ben got a job in Boston this year. The bungalow they purchased for $170,000 two years ago is now pending a sale for $239,000. The 40% spike in price for 1438 Seventeenth St. could be surprising for some — especially since the home sold for just $39,000 in 2013, following a mortgage foreclosure.”

“On a cool spring day last week, Johnny Espino stood outside his family’s home on Hubbard. ‘That one sold for $110,000. I heard that’s going for $177,000,’ he said about one house on the block. ‘The rich are coming back and buying homes for any price you put on it. We could probably put this house on the market for a quarter of a million and it would sell.’”

“He may not be exaggerating. One street over, a house on Vinewood in the nearby historical Hubbard Farms is pending a sale for $300,000. That home was built in 1900. It’s 2,879 square feet with four bedrooms, two baths. Jose Franco has called southwest Detroit home since he was 3. Franco always assumed he’d buy a home where he grew up. It’s recently occurred to him that this may not be possible ‘I tear up a bit because it’s becoming harder for me to find something for myself, it’s getting ridiculous,’ said Franco. ‘We don’t make crazy money. It’s getting hard to find affordable places to buy … because outsiders are coming in and buying them up like candy almost.’”

From “It’s no secret that we’re in one heck of a sizzling housing market, with prices reaching new heights in many parts of the country. It’s a go-go seller’s paradise of historic proportions. It may seem like nothing can slow down those runaway prices for everything from high-rise condos in the biggest cities to cookie-cutter, single-family homes in the suburbs. But here’s the news: There are exceptions to every rule.”

“There are actually a few metropolitan areas in the U.S. where prices are coming down. (Only 27 of the nation’s 350 largest metros saw price drops.) We compared the 12-month periods of May 2016 to April 2017 with May 2017 to April 2018 to come up with our findings. Then we ranked metros that saw the biggest price cuts. Now let’s take a look at the metros where buyers can still get a home for a discount. Maybe even a deep discount!”

“1. Santa Maria–Santa Barbara, CA. Median home list price: $951,600. Price drop*: -17.7%. The tony swath of California coast, almost two hours north of Los Angeles, got hit with a double whammy of natural disasters over the past year. 2. Pottsville, PA. Median home list price: $72,300. Price drop: -8.1%. The unemployment rate hit 5.7% in March, well above the national average of 4.1%. That’s left fewer folks with the means to become homeowners. ‘Homes between $50,000 to $125,000 aren’t selling as fast’ as they were last year, says Erica Ramus, owner and broker at Ramus Realty Group.”

“3. Napa, CA. Median home list price: $823,900. Price drop: -6.7%. ‘In the immediate aftermath [of the blazes], the market slowed down,’ says Kristofer Chun, an associate broker at Kristofer Chun Real Estate, in Napa. ‘We are slowly seeing some of these burnt-out lots come on the market priced around $500,000,’ Chun says. That’s a fraction of what they were valued at before the blazes.”

“4. Austin, TX. Median home list price: $373,000. Price drop: -4.3%. For years, fun ‘n’ funky Austin has been experiencing a prolonged growth spurt. Builders responded in kind by putting up sleek, new apartment and condo buildings downtown and creating new subdivisions and communities of more suburban, single-family homes on the outskirts of the city and beyond. But they may have gone a bit overboard. The result has been something rare these days: a surplus of housing. After years of surging home prices, they’re finally beginning to head south as a result of that overbuilding.”

“Not only have prices dropped, but foreclosures are up, too. That’s a sign of an overheated market: If prices get too high, buyers might overextend themselves in an attempt to get their foot in the door. In the first three months of this year foreclosures in Austin increased 30% compared with the same period last year, according to ATTOM. Those increased foreclosures came from borrowers who bought homes a few years back when prices were lower—so recent borrowers who took out even higher debt loads might be headed for trouble.”

“‘The Austin market has performed very well for the last few years, but it is not immune to some distress creeping in,’ ATTOM’s Darren Blomquist says. The surge in foreclosures means ’some folks [are] getting into homes they couldn’t afford.’ Long before the rest of the housing market fully recovered from the last recession, Austin was growing at a rapid pace. If prices keep falling here, the rest of country might want to hope the city isn’t a bellwether this time around, too.”

From Patch Cambridge on Massachusetts. “Apparently there are only two homes currently on the market in Cambridge with pool access, according to the folks at And this is one of them. It’s part of the River Court Condominium complex which is not a small building built in 1989. The unit is about the size of a small house and comes with plenty of amenities you might find in such a building, but it does come with a heavy price tag: just under a $1 million. Check out what the realtor has to say about it and start window shopping.”

“Address: 10 Rogers St Apt 720, Cambridge, Massachusetts. Price: $995,000. Square Feet: 1208. Bedrooms: 2. Bathrooms: 2 Baths. Features: Benefit from 1st Buyers Remorse!”