The Housing Bubble

A report from the Kitsap Sun in Washington. “Although Kitsap County’s housing market has been firmly balanced in the favor of sellers for most of the year, buyers are now finding they have regained some bargaining power heading into summer, as more houses are coming onto the market. ‘We have a lot more listings, which means there will be more competition between sellers,’ said Silverdale-based John L. Scott broker Shelley Morritt. ‘The more listings we get on the market, the more it’s going to change to a buyer’s market rather than a seller’s market.’”

“For those above the $300,000 price point, Morritt said sellers shouldn’t be concerned if their properties are staying on the market for a bit longer than other comparable homes that sold earlier this year. The market conditions have changed. ‘If it takes longer than a couple of weeks in this market to get an offer, it’s because you’re overpriced. There’s a lot of greedy sellers,’ she said. ‘They’d be better off pricing it to what you think it will sell for rather than what they’d like to make. Don’t price yourself out of the market.’”

From the Denver Post in Colorado. “Metro Denver experienced a nearly 25 percent surge in the number of homes and condos available for sale in May versus April, according to the Denver Metro Association of Realtors. Unlike prior months, a surge in new listings wasn’t matched with a commensurate surge in home and condo sales. Those rose 6.5 percent to 5,235 during the month and are down 10.9 percent year over year. The median price of a single-family home sold in May dropped 0.88 percent from April to $451,000.”

“‘Overall economic conditions like employment, job growth and net migration are stronger today than 2007-2008. I don’t see a bubble any time soon, but keep an eye on inventory,’ Steve Danyliw, chairman of the association’s market trends committee, said in the report.”

From Biz West on Colorado. “As we head into summer — and peak season for residential real estate sales — it’s instructive for would-be Front Range homebuyers to get a lay of the land and see how regional housing prices are stacking up. We found one potential sign of prices easing up this spring. The Estes Park, Greeley/Evans, Loveland/Berthoud, and Windsor/Severance sub-markets all reported average sales prices slightly below their first quarter averages.”

From Mansion Global on New York. “Manhattan’s luxury real estate market is chugging along at a steady pace, said Donna Olshan in her eponymous Olshan Report. Buyers were getting an average discount of 11% from the original asking price, the report said, while properties spent an average of 390 days on the market. The priciest deal was for a full-floor co-op unit at 640 Park Ave., on the Upper East Side. The six-bedroom apartment was asking $21 million, reduced from the $25 million it was first listed for in February last year.”

“For the first time in more than a year, not a single co-op or condo was sold on the Upper West Side, though one townhouse did go into contract, the report said.”

From The Union in California. “Now that most of the votes have been counted, the losers have made their excuses, and the winners have advanced dubious theories for why they were victorious, do you still have questions about last week’s election? So much for the carpetbagger issue: Opponents of Rep. Tom McClintock love to point out that he can’t vote for himself because he doesn’t live in the Fourth Congressional district, but his opponent in November, Jessica Morse, is hardly a homebody. She returned to the area recently after long service elsewhere in the federal government.”

“(McClintock claims he can’t move into his district because he bought his house in Elk Grove just before the real estate bubble burst and would have to take a loss if he sold. Given today’s housing prices, that excuse doesn’t work anymore.)”

From the Illinois News Network. “Steinar Andersen is a disabled veteran, widower and father of a disabled stepson who is ready to move out of Illinois. But he can’t. Employed as a information technology manager, he and his wife bought an old farmhouse near Huntley in 2005. After the housing bubble burst and the state widened a nearby road, he’s deeply underwater on his loan. ‘I still owe $187,000 in principle,’ said Anderson, 55, now fully disabled from a service-related injury. ‘Once I get to $90,000 in principle in about 10 years, I’ll be able to sell at a $130,000 loss.’”

“Andersen isn’t alone. Collen Percy and her recently retired husband are $85,000 underwater on their suburban Plainfield home. They’re worried about property taxes eroding their home’s value further, pushing a potential payoff of their home further into their twilight years. ‘We’re stuck,’ she said. ‘We would love to sell [our home] and go live in a smaller home so we don’t have the upkeep and tax burden.’”

“Two new reports on home equity reveal that a number of Illinoisans, like Anderson and Percy, may be chained to to the state by a mortgage larger than their home is worth. A study of negative equity by Zillow found 16.4 percent of Illinois homeowners with a mortgage owed that is more than their home was valued as of the end of 2017. ‘There are several metro’s throughout Illinois that are even higher,”’ Zillow economist Sarah Mikhitarian said.”

“Centralia, Dixon and Canton are the highest, with nearly two of every five mortgages underwater. Chicago, Illinois’ economic engine and home to the state’s highest wages, saw 15 percent of mortgages carrying negative equity, representing $28 billion in lost home value.”