September 6, 2018

The Red-Hot Market Is Taking A Breather

A report from the Democrat and Chronicle in New York. “The 1,424-square-foot, two-story Colonial is in picture-perfect condition. In the heart of the popular North Winton Village neighborhood, the home at 15 Wisconsin St. has been floating on the market, now reduced to $137,900 from $140,000, without an accepted offer. ‘If it were spring it would have 10 to 15 offers in the first two days,’ said Davide Salafia, the listing agent who with his brother Sal also flipped the home for resale. ‘The pulse is not there.’”

“Welcome to the fall real estate market in Rochester. The red-hot market earlier this year is taking a breather. Real estate professionals attribute it to a seasonal slowdown. ‘We’re seeing a shift in the market,’ said Angie Flack Brown of Keller Williams.”

“The multiple-offer situations just are not as common anymore, Brown said. Buyers are more prudent and carefully thinking things over and not rushing into a bidding war, she said. What does this mean if you’re a buyer or a seller in the current market? For the buyer, you have more of an advantage than spring, and for the seller, homes may need to be priced accordingly and not based on market highs.”

“The Greater Rochester Association of Realtors reported an increase in new listings in the second quarter of the year compared to the same time in 2017 for the following counties: Yates (+11.9 percent), Ontario (+11 percent), Allegany (+10.1 percent), Genesee (+9.2 percent), Steuben (+6.8 percent), Orleans (+5.6 percent), Monroe (+0.6 percent), and Wyoming (+0.6 percent).”

“The Monroe County region traditionally sees a slowdown in July and August as people go on vacations, but the market has been strong later into the summer in recent years due to lack of inventory, Salafia said. Salafia noted this is a seasonal cooldown and not indicative of the long-term market, which he expects to heat up again early spring. That means buyers will not have to be rushed into making a decision with fewer buyers in the marketplace.”

“‘It’s truly the perfect time for the buyer that missed out in spring,’ Salafia said.”

The Colorado Springs Gazette. “Colorado Springs-area homebuilding fell last month for the first time in a little more than a year, but remains ahead of last year’s pace and still appears on track to reach a 13-year high, one industry expert said. Permits issued by the Pikes Peak Regional Building Department for the construction of single-family homes totaled 298 in August, a 10.2 percent drop from the same month last year, a Regional Building report shows. It was the first year-over-year decline in single-family permits since June 2017.”

“Even so, the drop likely is a one-month downturn in an otherwise strong year in which building permits should top 4,000, said Mike DeGrant, board president of the Housing & Building Association of Colorado Springs and a vice president with Springs developer Schuck Communities. Through the first eight months of 2018, single-family permits totaled 2,798, a 17.4 percent increase over the same period last year. If permits exceed 4,000 for the year, it would be the highest total since a record 5,314 were issued in 2005.”

“‘I think that’s a minor blip on the radar,’ DeGrant said of the August building permit total. ‘The market is still there,’ DeGrant said. ‘If we could continue on with lot development and (regulatory) approvals and availability, I don’t think we would have seen that blip at all.’”

The San Diego Reader in California. “Villa Hermosa, a nearly-century-old mansion overlooking Mission Valley from atop the northerly bluffs of Mission Hills, offers a look at what constituted the pinnacle of design standard in the days preceding the onset of the Great Depression. Villa Hermosa has been in search of a buyer since mid-2017, when the property initially commanded an asking price of $2.8 million. That price had been reduced to $2,495,000 by July, when the property briefly entered escrow. That transaction appears to have been cancelled, and the property was offered back up for sale in mid-August with a price reduction to $2,350,000.”

The Slowdown Is Really Related To Prices

A report from the World Property Journal on Nevada. “According to the Greater Las Vegas Association of Realtors, after climbing steadily since 2012, local Las Vegas home prices have been hovering this summer through August 2018, are maintaining the same home prices as they were back in May 2018. ‘Our housing market has been cooling off a bit this summer. I wouldn’t say we’ve shifted from a seller’s market to one favoring buyers, but we’re starting to see the scales tilt more in that direction,’ said GLVAR President Chris Bishop. ‘Home prices and sales are starting to soften around the country. Most experts, including NAR Chief Economist Lawrence Yun, have been predicting slower appreciation and more inventory heading into 2019.’”

“Bishop said the housing supply increased in August. By the end of August, GLVAR reported 5,818 single-family homes listed for sale without any sort of offer. That’s up from July and up 12.8 percent from one year ago. For condos and townhomes, the 1,184 properties listed without offers in August represented a 73.4 percent increase from one year ago. The total number of existing local homes, condos and townhomes sold during August was 3,881. Compared to one year ago, August sales were down 6.4 percent for homes.”

The Associated Press. “A slowdown in U.S. home sales is weighing on homebuilder stocks. Most of the builders are down more than 15 percent this year. Builder shares were already having a rough year as investors worried that rising mortgage rates could dampen sales. Those jitters appear to have been well-founded. A recent batch of weak housing data suggest the housing market is losing momentum. ‘The slowdown in activity is really related to prices,’ said BTIG homebuilding analyst Carl Reichardt.”

“Sales of new U.S. homes slumped 1.7 percent in July, the second straight monthly decline. Sales of previously occupied homes have fallen four months in a row. Builders have been aggressively raising prices for several quarters amid increased costs for lumber, steel and other building materials. The industry has also been grappling with escalating cost for labor and land. The average sales price of a new home climbed 5.8 percent in July from a year earlier to $394,300.”

“‘The consumer is resisting that to some degree,’ Reichardt said.”

Sellers Created Downward Pressure In The Market

A report from the Denver Post in Colorado. “The number of homes on the market surged, the number of sales dropped, and price reductions were abundant last month, all signs that buyers are pulling back in metro Denver, according to the latest market trends report from the Denver Metro Association of Realtors. The inventory of single-family homes and condos available for sale at the end of August rose to 8,228, an increase of 7.65 percent from July and 11.8 percent higher than August 2017. Normally, the inventory barely drops between the two months and the change set a record.”

“‘Over the past four years, we’ve experienced the strongest sellers’ market in recorded history,’ said Steve Danyliw, chairman of the DMAR Market Trends Committee. ‘This past month, we saw available homes for sale increase to the highest level in four years, giving buyers more homes to choose from.’”

“Single-family home sales in August dropped 7.46 percent from July, and are down 9.75 percent from the same month a year ago. Condo sales dropped 5 percent for the month and are down 15.6 percent from August 2017. About 30 percent of sellers lowered their listing price in August to entice buyers, Danyliw said. That has created downward pressure in the market.”

“Danyliw pointed to several signs that buyers are pushing back more — fewer multiple offers on properties, fewer inspection allowances and fewer appraisal guarantees. That said, homes that are priced correctly and move-in ready still sell quickly.”

From Mansion Global on New York. “Luxury buyers signed contracts for 16 homes in Manhattan in the week ending Sunday, modest activity reflecting the effect of a long holiday weekend, according to the Olshan Report. The most expensive contract signed was a Tribeca condo carved out of the top five floors of a townhouse on Harrison Street, asking $11.5 million. The 8,442-square-foot home sits above a mixed-used first floor. The home has six bedrooms and six bathrooms, and hit the market in June 2017 for nearly $17 million.”

“The second most expensive home to find a buyer was a tie between a Fifth Avenue co-op and a brownstone on the Upper West Side, both asking $9.95 million. The Fifth Avenue co-op marked a loss for Marc Lasry, billionaire hedge funder and co-owner of the Milwaukee Bucks, who bought the one-bedroom, two-bathroom apartment for $10.6 million in 2011, according to the Olshan Report.”

From Chelmsford Patch in Massachusetts. “What was once Chelmsford’s priciest home for sale has seen its asking price drop by over $100,000 since it was first listed. This five-bedroom with a pool hit the market last August at $989,000 and is now listed at $829,000.”