June 4, 2018

When Buyers Fly Too Close To The Sun

A report from The Real Deal on California. “Homeowners in Southern California are increasingly hanging out For Sale signs amid a continued shortage of residential units statewide. There were 30,215 residences on the market in the four-county SoCal region as of mid-May, an increase of 7,000 since the beginning the year, according to a new study from ReportsonHousing. That’s more than triple the rise of 2,000 over the same period in 2017, according to the Orange County Register. Combined, closed home sales in the four counties was down 7 percent year over year, to 13,990. The average number of days a home spent on the market also ticked up to 65 days, according to ReportonHousing, from 59 days a year earlier.”

“In L.A. County, there have been 3,368 new home listings since January, up from 1,478 in the before. Overall supply stood at 11,417 listings. The number of closed deals in L.A. County dipped to 5,824, down 9 percent from last year.”

From the Mercury News on California. “DeLeon Realty used to shuttle Chinese investors on home tours around Silicon Valley in a 14-seat Mercedes van. But when the flow of Asian investors slowed about two years ago, the Palo Alto brokerage replaced the van with a couple of sedans — a Bentley and a Maybach — to cater to a new, smaller class of wealthier clients. ‘We sold the bus,’ said DeLeon CEO Michael Repka. ‘By that time, we had already seen the shift.’”

The Naples Daily News in Florida. “According to the Naples Area Board of REALTORS (NABOR), which tracks home listings and sales within Collier County (excluding Marco Island), Collier County has a 7.76-month supply of inventory compared to a four-month supply nationally. Condominium inventory grew 2 percent in April to 3,003 units, over half the entire market, from 2,934 units in April 2017. Interestingly, the median closed price of condominiums in April dropped 8 percent to $271,000 from $296,000 in April 2017. ‘Sellers are pricing properties to sell and it shows,’ said Adam Vellano, West Coast Sales Manager, BEX Realty - Florida.”

“April’s month over month activity was even more impressive in the North Naples area, as reflected in a 26 percent increase in closed sales. Similarly, the median closed price of condominiums in North Naples dropped 14 percent in April to $258,000 from $300,000 in April 2017.”

From the Miami Herald in Florida. “Aventura, Key Biscayne and other ritzy enclaves in Miami-Dade County saw their property values dip this year as a sagging condo market cut into prices and new construction slowed down from its previous boom pace. ‘We are beginning to see the effects of market corrections, primarily with condominiums and high-value, single-family residential properties, such as in Key Biscayne and Sunny Isles Beach,’ said Pedro Garcia, the county’s elected property appraiser. ‘We continue to see the same market trends as last year, with an oversupply of condominiums putting downward pressure on condo values.’”

“Every corner of the report portrayed a housing market cooling off, compared to the 2017 results. ‘here’s a lot of inventory,’ said Nelson Gonzalez, a real estate agent who specializes in luxury Miami Beach condominiums. ‘The buyers still have the pick of the litter.’”

From The Real Deal on New York. “Two foreclosures momentarily rocked the real estate world and were seen as warnings of what happens when buyers fly too close to the sun. From more of a bird’s-eye view, the apartments in One57 were two of 3,306 homes throughout the city scheduled for auction last year — the highest level seen since 2009, according to PropertyShark. Brooklyn and Queens primarily drove the city’s 58 percent year-over-year increase, with 827 and 1,260 first-time foreclosures, respectively.”

“There are signs that cost burdens are taking a toll. In the first quarter of 2018, the New York metro area — including the city and parts of New Jersey and Pennsylvania — had the 22nd-highest rate of foreclosures of the 219 areas tracked b ATTOM Data Solutions. During that three-month period, 920 homes were scheduled for foreclosure for the first time — a 31 percent year-over-year increase, according to PropertyShark.”

“New foreclosures on Staten Island jumped 226 percent to 189, compared to 58 in the first quarter of 2017, according to the report. Brooklyn experienced a 64 percent year-over-year increase with 275. The Bronx followed with 117 scheduled foreclosures — a 33 percent increase — and Queens had 303, representing a 13 percent decrease year over year. Manhattan only logged 38. ‘We’re clearly not out of the woods of the last foreclosure crisis,’ said Jacob Inwald, the director of foreclosure prevention for the nonprofit Legal Services NYC. ‘It’s not crazy to think that we’ll see another.’”

“Owners of higher-end properties in New York are finding that their investments aren’t worth as much as they had anticipated. ‘I’m meeting with a lot of sellers right now who are like, ‘Look, I paid X amount, how can you tell me that it’s worth less?’ said Douglas Elliman broker Frances Katzen.”

From the Independent Mail on South Carolina. “Real estate values on the state’s lakes have bumped up 15 percent since spring 2017, according to Lake Homes Realty. And Upstate lake properties are leading the way. The upward trajectory has carried over to lake properties, local real estate experts say, though they acknowledge values will likely never recover to pre-2008 levels. Longtime lake Realtor Bill Brissey in Anderson said he had lots selling for $300,000 in the early 2000s.”

“‘We’re talking just lots,’ Brissey said, ‘and we don’t see as many selling for that. We had a big downturn in 2008, and lakefront properties still have not gained back what they lost.’ Before the 2008 crash, many people bought lakefront property just to flip it, said Glenn Phillips, CEO of Lake Homes Realty. ‘They lost money the day they bought those lots,’ Phillips said. ‘The market will never recover to help those people.’”

The Topeka Capital Journal in Kansas. “The exact recipe that makes up the Topeka housing and rental market is tough to determine. Longtime Realtor Helen Crow is perplexed as to what’s happening locally in what she called a ‘bizarre’ market. It’s common to have between 800 and 1,400 homes listed for sale in the area’s multiple listings database, Crow says. When Topeka hits around 750 or 800, it’s low. But this year, homebuyers face significantly different numbers.”

“‘I have not seen us break 375 currently on any given day,’ Crow said. ‘This is inexplicable. We have hundreds and hundreds of empty houses in town. We’ve got a vast oversupply of housing in Topeka, but we’ve got this real estate market that’s so tight.’”

“Crow points to multiple vacant houses in central Topeka, at Lake Sherwood and throughout the capital city that aren’t listed, and she’s not sure why. But whatever the reason, houses are selling fast. ‘We haven’t had a market this hot since the ’70s,’ she said.”