The Housing Bubble

A report from the Sierra Sun. “As we reach the end of January 2018, it’s interesting to note that the inventory of Incline Village and Crystal Bay residential real estate currently for sale on the multiple listing service is far less than what it was just 2 years ago. Part of the reason that we have seen the inventory drop to its lowest level in several years is the unusually high rate of sales during the past two years. In 2016 and 2017, we had well over 400 properties closing escrow each year in Incline Village and Crystal Bay. This is well above the historical norm of the mid 300s that we saw in 2014 and 2015.”

“Realistically, we are not going to see a return to the boom times of 500 to 600 residential transactions per year anytime soon unless there is some type of extraordinarily positive economic event or a new buying mania grips the general public.”

The Portland Mercury on Oregon. “Portland City Council is considering adding two new fees to Portland’s growing Airbnb market. Over a dozen Airbnb hosts spoke in opposition to the ordinance at a June 13 city council meeting, calling it ‘regressive’ as well as a threat to their own ability to afford Portland’s housing prices. ‘Airbnb is helping thousands of Portlanders like myself to monetize our biggest asset and stay in our homes,’ said Airbnb host David Bo at the meeting.”

“Data from Insideairbnb.com, an independent website that provides data on Airbnb’s footprint in major cities, shows the company has more than 4,700 listings in Portland. Entire houses and apartments (as opposed to a single room in a home) make up about 66 percent of those listings. The proposed fee, however, is meant to address a housing crisis that is exacerbated by a glut of STRs in Portland.”

From Curbed Seattle in Washington. “Despite a glut of luxury apartment towers moving into Seattle, very few of them are actually the condos they appear to be—except when they suddenly switch it up. A 41-story tower coming up at Sixth Avenue and Wall Street, bordered on one side by Denny Way, will be condos and not rental units as originally planned. The building broke ground on Tuesday.”

“The project, now dubbed ‘Spire,’ has been in the works since 2006, when California-based Laconia Development bought the property. Plans were ultimately abandoned during the recession, then picked back up in 2013, when it started winding through design review.”

From Builder Online on New York. “Home prices and sales inventory in Manhattan, Brooklyn and Queens spiked in May, with inventory across the city reaching all-time highs, according to StreetEasy. The company said that while sales inventory often peaks in May amid home-shopping season, this year set new records. Inventory in Manhattan rose 16.7% compared to last year, the largest year-over-year increase on StreetEasy record. Brooklyn and Queens saw similar surges, with inventory up 23.4% and 42.8%, respectively.”

“While inventory levels rose dramatically, the number of recorded sales fell for the third consecutive month. Recorded sales dropped in every submarket across Brooklyn, Manhattan and Queens, with the largest annual dips occurring in Upper East Side, Midtown and the Rockaways.”

“One out of every six homes received a discount. 16% of homes for sale were discounted, an increase of 3.6 percentage points year-over-year. ‘Sellers are betting on a wave of demand from the peak shopping season, but this summer’s market has turned out to be a crowded one,’ says StreetEasy Senior Economist Grant Long. ‘Higher-end homes, particularly those joining the market from the ongoing stream of new development, will be pressured to lower prices or linger on the market. This summer is poised to offer an excellent negotiating opportunity for buyers with big budgets.’”

The Voice of San Diego in California. “Kirk Effinger, a Realtor and writer from Escondido, gets very defensive in his letter to Voice of San Diego in response to a recent op-ed by Russell York. In Effinger’s letter, his aggressive tone would suggest that York hit a raw nerve by pointing out the fly in the ointment of the ‘build anywhere and everywhere’ paradigm. This glut of high-end housing is not being purchased by people trading up, as Effinger argues.”

“Effinger shrugs his shoulders, admitting, ‘Will the housing being proposed in the unincorporated areas of the county be largely available only to upper-middle and upper-income families? Perhaps.’ This lack of certainty echoes the Building Industry Association’s position that we can’t guarantee affordable housing but maybe, just maybe, if we build enough high-end housing, it will somehow trickle down to the poor and the homeless. Unfortunately, the facts have not borne this out. When we produced 152 percent more ‘above moderate’ units than needed between 2007 and 2014, it had no impact on housing costs overall.”

From KSBY in California. “Mission Hills residents are buzzing about plans for a new supportive housing facility called Brisa Encina. The County of Santa Barbara posted a sign for public notice. Some neighbors do not support the planned project. ‘I don’t like the idea of them putting a facility up here when they have so many vacant buildings downtown,’ said Denise Rojas, Mission Hills resident.”

The Hartford Business Journal in Connecticut. “Hartford area sales of existing dwellings — as well as inventory — dropped in May just as the peak summer sales season opens, Realtors say. There were 1,089 single-family houses sold last month, down 2.3 percent from 1,115 units closed on in May 2017, Greater Hartford Association of Realtors (GHAR) said. Median price for those sold homes fell 1.7 percent, to $225,000 vs. $$228,900 a year earlier.”

“The inventory of houses for sale plummeted 13 percent to 5,344 units available from 6,147 for sale a year ago, GHAR said. A lack of inventory — or too much — impacts sales and prices. ‘Low inventory levels are making it difficult for housing sales to progress,’ said GHAR CEO Holly Callanan.”

From Tap into Newark in New Jersey. “Prominent members of Newark’s African-American clergy community converged at an Essex County government hearing to argue that additional measures are needed to find some relief for local homeowners facing foreclosure. ‘This is a crisis of epidemic proportion in our particular county,’ said the Rev. Ronald Slaughter, the pastor of St. James AME Church in Newark, at a hearing held earlier this week at the Essex County Hall of Records. ‘To put someone out of their home after 15 or 20 years for missing a few payments, and not allowing them to make things right, is a crisis.’”

“According to a January report from ATTOM Data Solutions, New Jersey led the nation in foreclosures in 2017 at a rate of 1.61 percent of all housing units, compared to a rate of .51 percent nationally. The report noted that as of the end of 2017, there are 57,559 New Jersey properties with a foreclosure filing, including default notices, scheduled auctions or bank repossessions. Essex County has been particularly hard hit by the wave of foreclosures. According to statistics cited by Slaughter, provided by Essex County Sheriff Armando Fontoura, the county executed about 3,000 foreclosure notices in 2017.”