July 24, 2018

It Will Sit Forever If A Seller Has An Inflated View

A report from News Channel 5 in Tennessee. “About 30 percent of millennial first time home buyers are pulling funds from their 401K, IRA, or borrowing against their retirement funds to afford a down payment, according to a new study. Locally, experts said that trend is not surprising, given how expensive and competitive the market is. Nashville realtor Paul Sek said he recommends people take the time to set themselves up for success and consider what you can realistically afford. Sek said he also often sees family members, particularly parents, helping millennials with down payments through personal loans.”

“‘People have completely neglected the starter home and they want the dream home right off the bat,’ Sek said. ‘They don’t understand they’re still in their 20’s or 30’s and they think they should buy the $500,000 or $1 million home.’”

From WKRN in Tennessee. “If you’re looking for a new home, you may have noticed some price reductions. So with an influx of people still moving to the area, could the price of homes be dropping? Sher Powers, President of the Greater Nashville Realtors, says there are definitely areas where buyers can get a really good deal right now. Powers said, ‘When people price they always need to look at what’s going on right now in the market, not yesterday, not tomorrow, they need to pull current comps, and not assume because prices rose every three months in their neighborhood that it’s continuing to do that. Everything sells if it’s priced correctly, and it will sit forever if a seller has an inflated view just because a neighbor’s house sold for $50,000 more.’”

From the Wall Street Journal. “Home sales fell for the third straight month in June, defying the strongest period for U.S. growth in years as rising mortgage rates and escalating prices at the lower end of the market drive away potential buyers. There were 1.95 million existing homes available for sale in June, up 4.3% from May and 0.5% from a year earlier. That is the first yearly inventory increase since the middle of 2015, according to Lawrence Yun, the trade group’s chief economist. ‘Maybe this is indicating that…the lows in inventory may be coming to an end,’ Mr. Yun said.”

“Jessie Culbert, a Redfin agent in Seattle said inventory there has increased, allowing buyers to move at a more leisurely pace. Previously, properties incited bidding wars and got 10 or 20 offers, she said. Now she counsels sellers that multiple similar listings are likely available. ‘We’ll have to sharpen the pencil on the list price,’ she said. Buyers she encounters have often toured 20 properties and seem to feel little urgency, she said, adding: ‘Many of the buyers got burned out. It’s just exhausting to be in the hunt for a long time and losing out.’”

From CBS Bay Area in California. “Allen Dugan’s home is still available after one open house which last year would have been unheard of for a property like this in Cupertino. ‘It’s unpredictable. We’re hoping for the best. Hoping to get a high price,’ says Dugan. It’s a refurbished farm house with a main house, a guest house and detached garage with a studio, all on a quarter acre. It just listed for $3.2 million.”

“But Dugan realizes the Silicon Valley real estate market is changing again. ‘We’ve been following the market for a number of years and it’s time to make a move,’ he says. ‘The market was crazy and now it’s gone from crazy to good.’”

“New numbers suggest the Bay Area real estate market cooled off a little in the May to June time frame. Sales of homes under a million fell by 50 percent since last year. Higher-end homes are holding their value, but are taking longer to sell. Real estate people are calling it ‘buyer fatigue.’ Realtor Dave Clark says some homes are still getting offers for over the asking price but others are selling for below asking price. ‘Now it’s what I call a perfect market. Prices are where they should be, activity is where it should be. We have multiple offers sometimes, sometimes we don’t,’ says Clark.”

“So far, no offers on Dugan’s place but since it’s walking or biking distance to the new Apple campus it shouldn’t take long.”

The American Statesman in Texas. “Amid strong demand for housing, Central Texas homebuilders ramped up production in the second quarter as they started work on more than 4,500 houses, new figures show. Starts totaled 4,537 from April through June, a 3.3 percent increase over the year-ago quarter, Metrostudy said. For the 12 months that ended in June, starts totaled 16,675 — up 1.9 percent from the prior 12-month period, the housing-market consulting firm said. ‘Thanks to continued strong job growth, demand is high,’ said Vaike O’Grady, Austin regional director for Metrostudy.”

“The supply of houses that are finished, but vacant — now numbering 2,872 homes — is up nearly 25 percent from a year ago. ‘While the level is relatively high, it’s indicative of builder confidence in future demand,’ O’Grady said. Half of the vacant inventory has base prices below $300,000, where there’s the most demand, O’Grady said.”

From Culture Map Austin in Texas. “In the Austin home market, it’s a tale of two trends. Homes for sale are spending longer on the market, but fewer homes are fetching prices above the list price, according to new data from real estate brokerage Redfin. One real estate agent says these two trends are a sign of much needed stability in the local market. Meanwhile, just 21.7 percent of homes in the Austin area were sold above list price in the first half of 2018, according to the Redfin data. That’s the lowest since the first six months of 2012, when 15.5 percent of home purchases were above list price.”

“‘After a very busy start to 2018, and several years of intense homebuyer competition and strong price growth, it finally feels like the local housing market is starting to stabilize,’ Andrew Vallejo, a Redfin agent in Austin, tells CultureMap. ‘In contrast with previous years, buyers are no longer pay[ing] whatever it takes to win a bidding war, and homes are staying on the market longer. Bidding wars are less common than they were earlier this year, and when there are multiple offers, we rarely see prices escalate as high as they did in previous years.’”

From The Real Deal on New York. “Even the cheap apartments aren’t selling. In Manhattan, units priced below $1 million are piling up, according to StreetEasy. Inventory climbed 27 percent in June from a year earlier — to the highest level for the month since 2013, the website found. It’s essentially a buyers’ market across the board, and the total number of available homes in Manhattan is at the highest for the month since 2011. In Brooklyn and Queens, total inventory for June was the most since 2008.”

“In the second quarter, Manhattan sales saw a third consecutive decline. As units pile up, condominium developers have been ramping up discounts and incentives. This month, Toll Brothers is holding a nationwide sales event in an attempt to boost sales. And Extell Development has offered price cuts and perks on sponsor units at One57. “