The Housing Bubble

A report from USA Today. “The housing market may be starting to benefit from the one thing that can loosen a long-running squeeze that has crimped sales and driven up prices: more homes. The nation’s housing inventory increased 12.2 percent in the second quarter, the biggest gain since early 2015, according to Trulia. The Nashville, Tennessee, area led the nation in the second quarter with a 52 percent jump in homes on the market compared with a year earlier, Trulia figures show.”

“‘There has been some more inventory,’ says John McClanahan, a broker for Village Real Estate in Nashville. As a result, he says: “Prices have been really stable the last few months. Things are a little slower. You’re not seeing as many multiple offers. There’s not as much of a frenzy.’”

“Other top metro areas with big inventory gains the past year include Salt Lake City (48.6 percent), Dallas (32.4 percent), Washington, D.C. (21.9 percent), and Little Rock, Arkansas (13.4 percent), according to the Trulia data. Inventory increased 1.1 percent in New York City, 2.9 percent in Los Angeles, 3.1 percent in Miami and 22.1 percent in San Diego.”

From Deseret News in Utah. “A recent survey of Utah business leaders reveals a healthy level of confidence in the current economy, but less bullishness when it comes to the near future. Wages are not keeping up with the cost of living, particularly when it comes to housing. Since 1991, housing prices have risen faster than household income by a factor of 10.”

The Sacramento Bee in California. “Sacramento’s home sales market has slowed, offering a touch of good news this summer for buyers. With few homes on the market, sellers still have the upper hand, but the tide is turning, new data suggest. The median price of existing Sacramento County home sales in June leveled off at $375,000, the same as the median in May. For the first time since early this year, less than half of sellers got multiple offers. More sellers have had to lower their asking price to make a sale.”

“There were 1,767 home-sale escrow closures in the county in June, two percent more than May, according to the Realtors association. But homes with pending sales in June were down 17.5 percent from May, suggesting the summer cooling season had begun. More homes were on the market, though, in June, at 2,660 than were in May, when 2,509 were up for sale. The average price per square foot of homes sold in the county in June was $240, down two dollars from May.”

The Mercer Island Repoerter in Washington. “What a difference a couple of months can make in the housing market. In May, inventory levels were still at record lows and many homes were getting multiple offers.With the median house price at $812,500 in Seattle and $978,000 on the Eastside, we are at a tipping point where record-high home prices, overly optimistic sellers and buyer fatigue have converged. The total inventory of homes listed for sale has now grown for three straight months on a year-over-year basis, suggesting a new trend. Redfin data showed 32 percent of homes across the region had price drops last month, up from 27 percent a year ago and the highest for any June since the company started tracking in 2012.”

“What does this mean for sellers and buyers? Sellers need to be more realistic about the value of their home and shouldn’t expect to get multiple offers or offers with Escalation Clauses significantly over the asking price. Buyers will likely have more homes to look at in their preferred price range and area and may encounter less competitive multiple-offer situations.”

From The Real Deal on Florida. “A proposal to build 360 affordable and workforce housing apartments in Overtown near Miami Worldcenter and Brightline’s MiamiCentral development is gaining traction. Miami-Dade commissioners unanimously approved negotiating a deal with Atlantic Pacific Communities to develop a $172.8 million mixed-use project with a total of 600 residential units. In the company’s application, Atlantic Pacific COO Kenneth Naylor boasted Block 45 would help level the disparity in Miami’s downtown, which is oversaturated with condos and apartments that a majority of city residents cannot afford.”

“‘Thousands of expensive luxury units have been and will continue to be, delivered into this marketplace, forcing much of our workforce out of this community,’ Naylor wrote.”

From The Real Deal on New York. “Prices keep sliding in the Manhattan rental market as concessions remain rampant. The net effective median rental price of $3,314 in June was down 2.8 percent year-over-year, according to Douglas Elliman’s latest market report. That’s the sixth year-over-year decline in seven months. Median face rents also fell 2.9 percent over last year to $3,400.”

“‘It’s definitely been consistent over the past couple of months,’ said Hal Gavzie, executive manager of leasing at Elliman. ‘It’s all tied to just all the supply. There’s just a lot of product out there.’”

The Morning Call in Pennsylvania. “There is no denying that downtown Allentown today is in better shape than it has been for many years. One of the most intractable issues facing the neighborhoods is their high percentage of older rental properties. More than 86 percent of the houses in the neighborhood are now rental properties, up from about 83 percent four years ago. That’s far more than the 55 percent citywide. Vacant and decaying properties also remain an issue. Nearly 20 percent of dwellings in the neighborhood were vacant, according to the 2016 data, about the same as it was four years earlier. Again, the problem is much less of an issue across the city as a whole, where the 2016 vacancy rate was 9.5 percent.”

“Mark Zartler, a landlord of nearly three decades downtown, said the main problem he saw four years ago and again these days is out-of-town landlords who don’t keep their properties presentable. ‘One of the biggest gripes I have is people don’t take care of the outside of their buildings,’ Zartler said. ‘I mean, I am constantly calling the city about trash.’”

From New Jersey 101.5. “As we move further away from last decade’s housing crisis, its lingering impacts on the real estate market are dwindling. But the Garden State still can’t escape its role as the No. 1 state in the nation for the percentage of properties in the foreclosure process. The foreclosure rate was higher in New Jersey than in any other state in the first half of 2018, the second quarter of 2018, and the month of June, according to Attom Data Solutions.”

“Through the first six months of the year, foreclosure filings hit 26,667 New Jersey properties — one out of every 125. Forty-seven percent of New Jersey’s foreclosures are linked to loans that originated between 2004 and 2008, the data show. ‘I do think that it can’t be blamed anymore on just the legacy foreclosures,’ said Daren Blomquist, senior vice president for Attom Data Solutions.”

“In the Atlantic City region, the foreclosure rate was a whopping 8.6 percent on FHA loans that originated in 2014.”