Buyers Want What They Want For A Steal
A report from the Wall Street Journal. “Western states experienced the sharpest decline for existing-home sales in the second quarter, a sign that rising prices, higher mortgage rates and, to a limited extent, the new tax law are weighing on pricier markets. Existing-home sales in the western region, including California, Washington and Arizona, declined 4.1% in the second quarter compared with the first quarter, according to the National Association of Realtors. The West, which has seen a particularly sharp run-up in prices in this six-year housing rebound, is bearing the brunt of the slowdown. ‘The West region has the fastest job-growing regions in the country, yet sales are coming down’ because prices have risen so much, said Lawrence Yun, chief economist at the NAR.”
The Sonoma Index Tribune in California. “Sonoma Valley home prices soared 24 percent this spring, an impressive jump fueled by a scarcity of houses on the market, agents said. Agents in the Valley attributed the double-digit increase to factors including a cluster of high-end sales and a dearth of homes for sale. Agent David Kerr said, ‘The east side of Sonoma is where a lot of the sales took place. We had a couple of sales in the $3 million range,’ driving up the average.”
“While agents said they weren’t concerned about a bubble, they conceded that the area is in a bit of a slowdown. ‘The market is good, but I wouldn’t say homes are selling like hotcakes,’ said agent Duane Margreiter. ‘We have seen price reductions on some properties – though some of that is a reflection of people shooting to get to the top of the market’ and listing homes at too-high prices, he said.”
“Agent Tracy Reynes said, ‘There are more price reductions across all price ranges in the Valley. This tells me price fatigue is starting to set in,’ referring to the near-constant escalation of prices for the last five or more years. ‘There are many more price reductions than I’m accustomed to seeing. That will help to dampen that extreme rise in prices moving forward,’ Reynes added.
“‘We are seeing a slowdown,’ Kerr acknowledged. ‘We are seeing buyers sit on the sidelines now. We are not seeing the same levels of activity we saw at the beginning of the year.’”
“Agent Carol Sebastiani summed up, ‘At some point, the market inevitably will correct, we just don’t know when. You can’t sustain the kind of momentum we have indefinitely.’ She added, ‘You have to be prepared for that inevitability at all times.’”
From Loudoun Now in Virginia. “The tug-of-war between supply and demand in Loudoun County’s hot housing market is getting even more heated. Husband-and-wife team Ryan and Megan Clegg, with Atoka Properties, said the market has created a stalemate between buyers and sellers. ‘In a lot of cases, sellers can get unrealistic about the value of their houses and buyers want what they want for a steal,’ Ryan Clegg said. ‘There are tons of buyers right now, but they’re not going to buy unless they feel like they’re getting value.’”
“The Cleggs have seen a few sellers reluctant to lower their price because they want a return on any upgrades they made to the home over the years. ‘We remind sellers that the market dictates your value. So you can have an appraisal that might help you set the price, but if you don’t get an offer you’re probably not at the right price,’ Megan Clegg said. ‘The line we get a bunch is ‘but we’re in the wealthiest county, surely they can pay this,’ Ryan Clegg said. ‘But buyers still want value.’”
“The prices now peaked at an all-time high have some in the industry having flashbacks to the market’s crash in 2008. But Jay Thomas, a Realtor with Keller Williams, describes the uptick in home prices—increasing between 4 and 6 percent annually—as pretty healthy. ‘There’s a lot of factors in play,’ Thomas said. ‘I just hope we stay healthy and not revert back to the bubble and burst again.’”
From Mansion Global on Florida. “Fueled by a surging condo market, Miami luxury home sales jumped in the second quarter, according to a report released Wednesday. Sellers of very fine luxury homes have adjusted prices ‘with a reduction ranging from 5% to 25%. That has stimulated pent-up demand,’ said Christopher Zoller of EWM Realty International.”