It’s Peaked And Going The Other Way Now
A report from the Seattle Times in Washington. “The slowdown in Seattle-area rent increases that began late last year has continued into the first part of 2018, as the crush of new apartments opening across the region catches up with demand in the fast-growing region. The recent cooldown has now extended long enough to be indicative of a longer-term trend. Analysts have pointed to a wave of new apartments opening since 2014; a record number of new units opened last year in Seattle, and even more are expected this year. The changes are most recognizable in the pricey neighborhoods of downtown Seattle and South Lake Union — home to one-third of the new apartments that have opened across the region since last year.”
“Compared to the high-points reached last fall, rents have dropped 6 percent in both downtown Seattle and South Lake Union. And the rate of vacant apartments has grown from 3.8 percent to 6.2 percent in the last year in downtown, and from 5.3 percent to 6.7 in South Lake Union, giving renters more options and negotiating power.”
“John Mullally, whose family has been in the apartment business since the 1940s, said he started noticing a slowdown around September at the 1,450 older units he owns in North Seattle and Queen Anne. Fewer people were applying to his apartments, and the people who were applying didn’t meet the background and income check standards as often. Since then Mullally has reduced the security deposit and offered a half-month of free rent for new leases, but he still has more apartments sitting empty than he used to.”
“‘The market has definitely changed,’ he said. ‘It was in an upward trend for quite some time, and I think it’s peaked and its going the other way now.’”
“Looking just at large projects of at least 50 units, the region has added 40,000 new apartments since 2014. That far outpaces the rate of population and job growth, but follows about 20 years of slow apartment construction. There are about 35,000 units across the region still in the pipeline that haven’t been built yet, roughly the same as a quarter ago.”
From Oregon Business. “Be careful about entering Rivage, a $60 million apartment complex perched along the Willamette River just north of the Fremont Bridge. You might never leave. You can work in the coworking space, have a drink in the communal living room and take a Tuesday yoga class with fellow residents. In 2017, 4,718 apartments came on line in greater Portland, according to CoStar, a commercial real estate firm. Many of the new residential developments, especially those in high end neighborhoods like the Pearl and Slabtown, resemble the Rivage, with services that rival hotels.”
“The new units, which rent for an average of $1,582, raise questions about affordability in a city scrambling to find reasonably priced housing. Today as hundreds of people sit on waitlists for affordable housing, high priced dwellings clamor for tenants. Rivage is only 60% full after being on the market for over a year. Q21, Rivage and Dianne are offering four to six weeks free rent to entice prospects.”
“‘Trying to separate yourself from a luxury standpoint is getting harder,’ says Joel Andersen, the developer behind the $46 million Q21 apartments in Slabtown. ‘The cost of everything has escalated so high.’ The oversupply issue is expected to go away soon.”
From Bisnow on Georgia. “Developers of gleaming new apartment towers in Atlanta are having a dickens of a time raising rents. In fact, they have lost ground, according to the latest report from the city’s top multifamily research firm. Same-store rents dropped 4.8% to some $2.30/SF at high-rise apartment developments within the Perimeter ring as developers saw a slowdown in the number of units leased by consumers, according to the first-quarter Haddow & Co. multifamily market report.”
“‘Communities in lease-up are renting an average of 15.1 units per month, down from 20.1 units per month a year ago, which is evidence of softening market conditions,’ Haddow & Co. officials said in the report. Fundamentals could be poised to only worsen in the coming year as a supply of more than 8,000 new units is slated to hit the market, outstripping aggregate demand overall, Haddow & Co. Vice President Ladson Haddow said.”
“‘There’s a lot more units out there for people to choose from than there was a couple of years ago, especially the high-rise product,’ Haddow said. ‘It’s not all doom and gloom because the market is strong, [but] there’s a whole other wave coming. We’re going to deliver more units in the next 12 months than we have, to date, of any 12-month period before.’”
From the San Francisco Chronicle in California. “For prospective renters on the hunt in San Francisco, there’s even more good news: Certain pockets of the city were seeing rents drop by double digit percentage points in March. The asking price for one-bedrooms in Cole Valley was down 14 percent in March and Inner Richmond prices fell 11 percent compared to a year earlier, according to apartment listing site Zumper.”
“‘Last year, in the Inner Richmond and Cole Valley, rents were spiking due to a lot of demand present, since these areas are safe/low on crime and tend to be less expensive than living in the surrounding neighborhoods like Hayes Valley or NOPA,’ Zumper’s Crystal Chen told SFGATE. ‘While the demand will always be there for these neighborhoods, the price has come down from last year since less people are looking to move right now and it seems a ceiling has been hit.’”
From the New Orleans Advocate in Louisiana. “Within a few blocks of Lee Circle, hundreds of new rental units and condos are expected to come online in the coming years, surrounded by tens of thousands of square feet of new commercial space. A lot has changed in the Central Business District since Marcel Wisznia purchased a blighted Carondelet Street parking garage for $4.9 million in 2007. But one thing has remained constant: Wisznia’s plan to redevelop the 1950s-era former Buick dealership into a high-end apartment building, complete with a car elevator to let residents pull right up to their door.”
“‘You can keep your groceries or whatever in your car until you virtually get to the front door,’ he said. Already, Wisznia believes, the bustling construction activity has made the CBD ‘a highly, highly competitive urban center’ where the real estate market could soon be oversaturated. But like many of the others who are backing their own projects, Wisznia, a local architect and developer, likes his odds for capturing a piece of the market.”
The Time Picayune in Louisiana. “Could rents in New Orleans be going down? A new report by RentCafe, an apartment search website, finds rents in New Orleans are down 2 percent, dropping to $1,088 a month. Nadia Balint, who authored the RentCafe report, noted new construction could be behind New Orleans’ dip in rental rates. The city had at least 10 recently built complexes, and another eight are under construction, she said. ‘On the supply side, it has been very generous in New Orleans,’ Balint said.”
From Bisnow on Pennsylvania. “It has been nearly a decade since the world’s economy was mired in the depths of the Great Recession, and commercial real estate has yet to see a real downturn since. But some of Philadelphia’s biggest names in the industry are not simply waiting for the other shoe to drop. And yet, the number of apartments delivered between last year and today is far beyond what has come before. According to a JLL report, buildings that delivered last year are only 47% occupied so far, meaning that around 1,300 apartments are still vacant from that set.”
“Two thousand seven hundred more units are expected to deliver this year, and absorption is only averaging 1,100 units per year in Philadelphia. Using those numbers, Philly projects to have 2,900 new apartments still available at the end of the year, or roughly two and a half years of supply. Concessions are very likely to increase as landlords fight for the available tenants, especially for apartments asking for over $3.50/SF in rent.”
“But developers are eager to point out that cities like Washington, D.C., have thousands more apartments in the pipeline. ‘There just aren’t enough buildings to create too much of an inventory, and everybody’s doing well,’ said Tower Investments CEO Bart Blatstein.”
The Bismark Tribune in North Dakota. “Williston Realtors sold more homes in the first quarter of the year than in any other previously — even outselling 2012 and 2014 boom levels. The city is in the midst of a single-family housing shortage that promises only to get worse as oil and gas activity picks up for the season. Apartments and hotels are at 90 to 95 percent occupancy already, said Williston’s Development Services Director Mark Schneider.”
“There are some apartment buildings in town sitting vacant because the owners don’t have anyone to manage them, according to Realtor Kassie Gorder. With those in use, apartment occupancy could be lowered to a rate of about 80 percent. She said the owners had listed them for sale a while back but no buyers could be found. Now that they’re vacant, finding a buyer could be even harder.”
‘developers are eager to point out that cities like Washington, D.C., have thousands more apartments in the pipeline. ‘There just aren’t enough buildings to create too much of an inventory, and everybody’s doing well,’ said Tower Investments CEO Bart Blatstein’
Yeah, and you are just catching up to Hong Kong. I don’t know what these guys are smoking but DC doesn’t have a dang thing to do with your market.
‘The changes are most recognizable in the pricey neighborhoods of downtown Seattle and South Lake Union’
Most expensive areas hit hardest - check.
‘high-end apartment building, complete with a car elevator to let residents pull right up to their door’
Useless amenity that will hang around the developers neck like an anvil - check.
“I don’t know what these guys are smoking but DC doesn’t have a dang thing to do with your market.”
It’s like the locusts who take their money from the sale of their San Fran house and pay some absurd amount for a house in Nevada, saying “this is cheap compared to San Fran,” never acknowledging the fact that it’s an asinine price based upon local wages.
But this is exactly what is happening - it is “cheap” in comparison, so they feel like it is a real “deal” on their new home in the “cheaper” market. We can sit on the sidelines and say that they are foolishly overpaying, but a full cash end-user buyer will pay what they think is a “great price” to live where they want.
The question is how does this, on a broad basis, impact long term prices - if equity locusts flood a particular market, does it really matter if they pay in excess of what local wages support? They aren’t relying on a local wage to mortgage the house, so in that transaction economic fundamentals don’t seem matter.
This is playing out in many areas, and it is the huge question that goes unanswered: does this scenario create a true “bubble”, or just reset area prices because people are buying homes to live in (not invest/speculate) in certain desirable areas with equity?
These people are not going to default on a mortgage (there isn’t one), don’t care what happens to to mortgage rates, nor will they be relying on appreciation to do a quick refi. Overpaying in a given market would only matter if they had to sell it and prices had dropped. This is a market variable that is going to be a huge factor with the wave of equity locusts and baby boomers retiring and cashing out of HCOL areas - I don’t know that we have seen it to this magnitude, if ever.
What say the HBB? Discuss.
Well, at some point they might have to downsize simply because of age related infirmities. Finding out that they can’t get what they paid for it, or that they might even have to “give it away” could impact retirement plans
This is exactly what is happening in my neck of the woods. Our county is the fastest growing metro area in the US on a percentage basis (southern Utah). We get lots of equity locusts from Southern California, parts of Las Vegas, and from the greater Salt Lake area. I think the effect that it is having is creating a distorted economy. Young families who live in this area are realizing that the local wages don’t support a starter house in the area because all the builders are building high-end luxurious stuff and 2nd (or 3rd) houses for wealthy retirees.
I am starting to see wages being pushed up on the low end as a result. Our minimum wage is the federal rate, but starting is at least $10 at any fast food joint. I think Walmart starts at $13-$14. It’s not enough to get by down here, but I think prices and wages are going up as rents and housing costs go up. Also, people are moving out too.
The other effect that I see this having is simply that people are going further and further in debt to buy. WSJ ran a story about this today (see “Rising Home Prices Push Borrowers Deeper Into Debt):
Roughly one in five conventional mortgage loans made this winter went to borrowers spending more than 45% of their monthly incomes on their mortgage payment and other debts, the highest proportion since the housing crisis, according to new data from mortgage-data tracker CoreLogic Inc. That was almost triple the proportion of such loans made in 2016 and the first half of 2017, CoreLogic said.
The thing about equity locusts who have cashed out and paid cash is that they still want to live in a decent area with reasonable services (police, teachers, nurses, doctors, food staff, etc.). So even if they got a relative deal, they will probably end up pushing up local wages in order to be able to provide the services the want.
My FIL must kick himself for having sold his law firm’s condo there many years ago.
These people are not going to default on a mortgage (there isn’t one), don’t care what happens to to mortgage rates, nor will they be relying on appreciation to do a quick refi.
AS IF they are just going to let that sweet equity sit there in their new house. They will be in debt up to their ears shortly. Gamblers gamble, but I would think a Dirty Lawyer would know that. Stop shilling with pretend questions like “is it really a bubble”?
They love the crime so much because they’re neck deep in it.
Good call, Karen.
His is a nonsense post by someone who definitely knows better.
hey love the crime so much because they’re neck deep in it.
It really is more than just gambling, you’re right.
No, it was an honest question. I want nothing more than my local market (Boise) to tank… it is going nuts right now in the desirable areas. Tons of out of area people are or have flooded the area - this is not organic local population growth.
The question “is it really a bubble?” is geared more towards the idea that these specific market forces seem to operate REGARDLESS of what is a “reasonable price” for a house - I am trying to wrap my head around the implications of that. I agree that they paid too much for local wages, but does that matter if they are not borrowing the money to buy?
So, the only response to my “nonsense post” is that they will, without question, borrow against their equity and then get caught with their pants down? Anything else?
Not trolling, just appreciate feedback and opinions. I see so many cracks in the wall, yet this train keeps rolling forward. It will hit a wall, but I wonder what will be the long-term impact on this market given all the in-migration, which is causing dramatic population growth and changing the market.
What you’re not seeming to understand (or if you do, you don’t discuss it) is that this massive inflow of people and cash from elsewhere is going to destroy Boise.
It will destroy Boise.
Equity locusts are bands of marauders. Literally. They move in, strip everything bare, lay waste to what was, and then move on. It’s why they are called locusts…a very negative connotation.
And they don’t give two sh*ts about it.
“Tons of out of area people are or have flooded the area - this is not organic local population growth.”
Or it’s the speculators.
We’ve already discussed this ad nauseum. There is no new paradigm. These people are going there simply to bank their equity gains in other markets. Once everything melts down, the prices in the cheaper markets are eviscerated, much worse than the more expensive areas.
Sounds good to me!
[i dont know if this completely true - talking to a guy in a bar in downtown Seattle]
He is in the construction biz - and he said that most of the large rental buildings in Belltown (downtown) and SLU (near Amazon) had the same business plan. One company builds the building. A second fills it up with renters (very quickly). They then sell it (after a full year of income stream) to REITs or Property Investment firms.
Basically it is like a pipeline - so the long term owners dont come in until 3 years after breaking ground.
Who is really taking the risk?
Who ever loaned them the money.
I dont know who provide the original funding (even in these days of low interest rates).
In older times (think 5+ years ago), you would see sign on construction sites: the general contractor, the bank financing the project, and a bunch of the subcontractor. These days i only see the banner of the general contractor. One notable exception is the gigantic project (3 towers) at the old Seattle Times lot on Denny and Westlake, where there are a ton of signs.
The concept that was new to me is that the long-term owners of the building were not the ones creating the project. i.e. the matter of fact turn-key concept.
Project signs are a requirement on publicly funded projects in an attempt to keep everyone honest and all the D and C documents are public record. There is no such requirement for borrowed money sketchy projects. The bagholders are the banks if there is no sign.
In older times (think 5+ years ago), you would see sign on construction sites: the general contractor, the bank financing the project, and a bunch of the subcontractor.
I still see such signs in my little burg.
Thanks for the insight hon.
Hey Donk
Big Banks Find a Back Door to Finance Subprime Loans https://www.msn.com/en-us/money/companies/big-banks-find-a-back-door-to-finance-subprime-loans/ar-AAvHQzc?li=BBnbfcN
“These days, Wells Fargo & Co. and Citigroup Inc. are unlikely to make a $14,000 auto loan to a borrower with a subprime credit score. That is now the domain of direct lenders such as Exeter Finance LLC, based in Irving, Texas.”
“But where does Exeter get the money to make subprime auto loans? From Wells Fargo and Citigroup. They have helped lend Exeter $1.4 billion for that very purpose…”
Exeter. Now there’s a name I haven’t heard in a long, long time.
Yet Exeter lives on.
“Big banks find a back door to finance subprime loans”
Same shit, different day. It’s always the big banks. Nothing’s changed.
“The nonbanks turn a profit by charging borrowers a higher rate—say, 15% on a subprime auto loan—than what they pay to the bank, which might be 3%. The bank makes money on that 3% loan because it is funded by deposits, on which it pays almost nothing.”
Enjoy that cat food, grandma, it’s all you get until you die. Cremation will be in order, too, because there’s no money for a coffin.
I remember that, NYC, 70’s, death wish (the new remake is bad.)
Earlier, in the mid-60’s, hanging out in the street, we heard that old people were eating cat food. Some would invite us in, because they were lonely, gave us cookies which they probably couldn’t afford.
When I was job age shortly after, working in a grocery store, some stupid asst mgr called me back to frisk an old lady, who was shaking and crying, for shoplifting, which I refused to do (I think I might have told this story before.) Hell, they all were.
I don’t remember being all that worried, but I was young. We were the first to have cable! You know, whatever you grow up in you think is normal. My mother was frazzled about the odd and even days to get gas.
NYC thought it was a good idea to paste fake windows on abandoned buildings - ridiculous. I used to stand on our roof and watch the Bronx burn. Good times.
the odd and even days to get gas…
I was working around the refinery in those days across the Arthur Kill. There was no shortage of oil. The tank farm was full and ships waiting off shore to unload. Never understood what was really going on with that.
Exeter. Now there’s a name I haven’t heard in a long, long time.
It was a nice run we had, eh?
“The tank farm was full and ships waiting off shore to unload. Never understood what was really going on with that.”
My somewhat limited understanding of the situation is that the presidents of the 1970s era, including Nixon, Ford and Carter, chose to implement command-and-control economic measures, akin to how Communist dictatorships of the day operated, in order to respond to the OPEC supply cut and other perceived “energy crises” of the day. So, for instance, rather than allow gasoline prices to rise to a level where quantity of fuel demanded equaled the restricted OPEC supply, Nixon opted for alternative-day rationing with price controls. These measures created unintended consequences, including gas lines which imposed a huge time cost to purchase gasoline which doubtless more than outweighed savings in pump price for anyone with a life and a decent job, and suppression of the price signal which might otherwise have elicited increasd supply from non-OPEC sources. The apparently abundant oil in storage was likely an artifact of the rationing.
More hints may be offered in this article. (I generally disagree with the writer’s understanding of political economy, but the historic information is of interest.)
“These measures created unintended consequences…”
Don’t forget 55-mph on the interstate.
Exactly the same scam they’re running in Downtown Los Angeles.
Had a friend who managed a building until vacancy reached a certain threshold - then it was sold and he was gone.
Useless amenity that will hang around the developers neck like an anvil - check.
I think the idea is that you can park your $200K+ super car by your door where you can keep an eye on it as opposed to parking it in a crowded garage where it might get dinged or scratched. There probably aren’t that many people for whom such an amenity is worth the price.
I told you I caused the top back in February by buying…
In talking locally and elsewhere online, it’s pretty clear that part of the current problem in the City of Seattle is that they built almost exclusively for one specific kind of renter - the young, single, recently graduated person with the highly paid job - that was identified as the ‘richest’ target.
There is a complete lack of anything new that fits a family - almost 0 3-bedroom or greater units have been built, while tons of (small) 1 and 2 bedroom or studio units have been laid down, maximizing the number of units.
There are a decent number of families that have relocated here from out of state for a high-paying (usually tech) jobs - I’ve met several just walking around my neighborhood the last couple years. These people are paying $3k/$4K/$more just to rent a SFH.
And… the first wave of post-recession recent grads that came for Amazon, Microsoft, Google, etc… they are doing this crazy thing of pairing off and generating larva… err… having offspring. And they need a bigger place and a different mix of nearby services and amenities.
So I’d say that we’re seeing clear oversupply in apartments in the City, but still not enough SFHs or larger townhomes/condos to meet demand.
Now, I do think detached houses are vulnerable going forward, but if /when they do take a hit, it will be trailing the apartments - possible by a decent amount of time.
‘There is a complete lack of anything new that fits a family - almost 0 3-bedroom or greater units have been built’
I consider condos and apartments to be the same thing for bubble considerations. Back when it was primarily condo-mania, the same thing happened: almost no family sized units. Why? They aren’t being built for end users. This is speculative construction. The long view of how this will be sustainable is not considered when the goal is making a quick buck.
Ben,
Exactly. All of these big projects are designed with maximizing profit/ROI as the #1 driving reason for their existence… not fulfilling a local demand or need. The distinction is importance: Maximizing profit drove the configuration of units, not demographics.
And just as every investor likes to think they’ll be among the first ones out the door, and escape before things collapse, all of these new units were targeting the same pool of most profitable renters with the same ‘premium amenities’, etc. I suppose for many, it was the only way to make the deal pencil out…
‘Make the deal pencil out’ is bubble talk. It’s an after the fact justification for paying too much for the land, which is the root of the mania. Why not ask, “what sort of project would be sustainable and suitable for the life of this building”? Jeebus, that would seem kinda primary, right?
This is how you spot irrational behavior. I wonder how the PTB can’t see it and apparently not even notice $1,000/day increases in shack prices.
“Be careful about entering Rivage, a $60 million apartment complex perched along the Willamette River just north of the Fremont Bridge. You might never leave. You can work in the coworking space, have a drink in the communal living room and take a Tuesday yoga class with fellow residents.”
___________________________/
Some of these places are marketed as a cross between a college dorm, a full-service resort, and a monastery. The French name makes it sound classier, apparently.
Is anybody falling for the drivel?
“Is anybody falling for the drivel?”
My take is such drivel is created to entice those pukes who are condemned to endure a life that truly sucks. These pukes are desperate to latch on an “If only” situation (If only I could [fill in the blank] then I would at last be happy.)
More drivel from Riverfront’s website …
“Riverfront living starts with tranquility and inspiration. Riváge Apartments offers a quiet connection to natural beauty and the conveniences of urban living. Interior design with nautical touches creates a sophisticated setting for your life, while greenways and generous patios offer constant waterfront views. In Frontside, a new neighborhood with everything you love about this city. Life is better on the river.
“Design like this is usually reserved for custom homes. The layout moves you gracefully from place to place. Floor-to-ceiling glass windows give light and air while preserving privacy. Quartz countertops, either a marble-like or porcelain chevron tile backsplash, and stainless steel appliances add a lustrous designer touch. The largest decks and patios in the city—all with river views—bring nature home.”
Etc.
Link …
https://rivageportland.com/
bring nature home
I can do that very easily & cheaply by going for a long walk in a snowstorm with a wind chill around 10 above. I have all of “nature” to myself, and very seldom do I meet anyone doing the same. In that weather “nature” starts on the front porch.
In the old days - say pre year 2000 - folks wanted to start families, wanted to live a middle class life in the ‘burbs.
It is amazing to me how many of my (and my friends) younger cousins don’t want this.
If you are not having kids - you can live at RiverFront
It is amazing to me how many of my (and my friends) younger cousins don’t want this.
What they say they “want”, what they really “want”, and what they will wind up doing in “reality” may turn out quite different.
The idea is to keep them wanting what they think they really want while concealing what they really want from their psyche.
If these pukes ever actually obtain what they really want then they will end their endless searching for what they think they want which means they will stop having to spend money they do not have on those things they really do not want, but only think they want.
If this happens in our consumer-based economy then the economy will tank and (gasp) I may have to get for myself a real job.
If this happens in our consumer-based economy then the economy will tank and (gasp) I may have to get for myself a real job.
I know you’re being rhetorical, as bankers never work real jobs.
It is amazing to me how many of my (and my friends) younger cousins don’t want this.
If there are disincentives to getting married and having kids, then fewer people will take the plunge. With the current environment of low wages, high divorce rates, housing costs, medical expenses and cost of raising kids in general, this isn’t surprising at all.
What they say they “want”, what they really “want”, and what they will wind up doing in “reality” may turn out quite different.
https://www.youtube.com/watch?v=sM_zTNOvPLI
If there are disincentives to getting married and having kids, then fewer people will take the plunge. With the current environment of low wages, high divorce rates, housing costs, medical expenses and cost of raising kids in general, this isn’t surprising at all.
The age at which men and women are getting married in the US is at an all-time high. The number of children being born (e.g. the fertility rate) in the US is at an all-time low. This has been happening for a while now. The closure of Toys R Us was mostly due to bad management, private equity, and excessive debt. But it was also due to changing demographics (read: fewer children, therefore fewer customers).
From what I have seen when it comes to buying toys the few who decide to have children more than make up for the many who decide not to have children.
No toy shall remain unbought when it comes to satisfying the limitless desires of the very precious and oh so special snowflakes.
Nobody in high office seems able to connect the dots between unaffordable housing, low U.S. birth rates and burgeoning homeless populations throughout the land. Guess what: These pheniomena are all consequences of the Housing Bubble!
“Nobody in high office seems able to connect the dots between unaffordable housing, low U.S. birth rates and burgeoning homeless populations throughout the land.”
In other words they’re still benefiting either in the pocket book or in constituent’s votes.
“Riverfront living starts with tranquility and inspiration. ”
LMAO. I bet I wouldn’t find their quarters particularly inspiring.
What inspires me are low prices and no frills. And no b.s.
How about $300 a month, utilities paid? That would inspire me enough to give them a call.
What nonsense is this with an accent over the “a” in “Rivage”? No where in the French language is there an accent of that type on the a, c’est de la folie!
Some of these places are marketed as a cross between a college dorm, a full-service resort, and a monastery.
It has a chapel where you can go for Matins or Vespers?
Sounds to me like they copied the “campus” blueprint of every worthless dot-fraud/spyware-disguised-as-social-app company of the past couple decades. No need to go outside as everything is right here! as you toil over worthless code for 15 hours a day.
Kenmore, WA Housing Prices Crater 6% YOY As Seattle Housing Correction Advances
https://www.movoto.com/kenmore-wa/market-trends/
Cherry-picking postage-stamp sized areas to prove your incorrect assertion, as usual, Haystacks?
Can you even find Kenmore on a map?
Hello my good friend.
Miami, FL 33134 Housing Prices Crater 8% YOY
https://snag.gy/m5EzRB.jpg
I remember a few years ago, when he was saying that Denver was cratering, a coworker sold her house in Arvada in one day with multiple offers.
Was talking with my manager (a Bay Aryan) yesterday. He was telling me that an acquaintance recently sold a cr@pshack (cr@ppy even by local standards) in Palo Alto in one day for 2.7 million. The new owner is going to tear it down and rebuild.
It is still insane out here. Going home later today. I hope they never ask me to move here.
I hope they never ask me to move here.
I can only say one thing in disagreement…in beats unemployment.
But yeah, my wife is here in Folsom this week after visiting me in San Jose a few times last year. So far she’s liking this a lot better even with much fewer good Chinese food options. She’s planning to move at the end of the school year.
October 8, 2015
The Denver Post reports from Colorado. “Residential real estate markets typically slow in September and the autumn months. But the changes underway in metro Denver appear to be going beyond the normal seasonal changing of colors. ‘Sellers are starting to chase the market down,’ said Anthony Rael, chairman of the market trends committee with the Denver Metro Association of Realtors.”
“Rael said he is noticing more homes in the $500,000 and $600,000 range coming down substantially from the original list price after spending weeks on the market. Of two dozen listings in that price range he recently reviewed for a client, about 20 had dropped their prices. Lower-priced homes are still moving quickly, but not at the frenzied pace seen from February to June, when multiple bids with waived contingencies above list price were common.”
http://thehousingbubbleblog.com/?p=9282
People forget many markets tried to roll over years ago and Mel Watt kept coming up with more gravy.
There is no “pent-up demand” for $500,000 starter homes in Denver.
Well…it’s pent up waiting for them to fall back to $200k.
IIRC, her house (back then) was in the mid 300K range. They traded up to a brand new McMansion in Highlands Ranch.
According to zillow, the median prices in:
Aurora: 312K
Broomfield: 414K
Thornton: 340K
You don’t have to pay $500K for a “starter home” in metro Denver. Sure, if you want to buy in Boulder or WashPark it cost a lot more. But there re options.
Or as a wise man once said, “Just rent it for half the monthly cost and buy later after prices crater for 75% less.
“People forget many markets tried to roll over years ago and Mel Watt kept coming up with more gravy.”
Truer words were never written on this blog! Exactly what happened, year in and year out. I thought this year would be different, but sure enough, it happened again in the areas I watch. Listings lingered for months with no interest and price reductions. Then suddenly (after loan limits were raised and standards reduced again), they all went pending at once, and overnight the frenzy returned.
It mimics seasonality (slow winter, crazy spring) but the swings are far more dramatic. My favorite version was 2013, where I saw a bank-owned apartment no one wanted linger for almost a year with multiple reductions until someone finally bought it for $500k. 6 months later they resold it for $760k, a 52% gain.
The stats don’t fully show this kind of volatility happening within the year vs. yoy. There are double-digit percent declines, and then someone flips a switch and there are double-digit gains.
“People forget many markets tried to roll over years ago and Mel Watt kept coming up with more gravy.”
I remember when things started slowing down everywhere, then all of a sudden Mel Watt added some crystal meth to the syringe full of housing heroin, and here we are 3 years later with eye-popping house prices. Was it just Smelly Mel, or is it the Chinese hot money, etc. helping things along?
Theres also a lag between stock market gains and RE prices going up - many thought Trump would crash the market, so people took their gains and probably some bought RE. But then the market went up bigly and more people are probably doing the same now - so lots of fits and starts. This lag goes back to at least Japan and its crash in the 80s leading to its RE mania in the early 90s and of course the 2000 crash/9-11 which then gave us bubble 1.0.
Denver foreclosures produced a sea of red ink in 2007.
https://imgur.com/a/wLrTp
many thought Trump would crash the market ??
Patience……
Have you decided to HODL your stocks, even though the market has peaked and is going the other way now, and all the positives the bull whisperers like to cite are fully priced in already?
Opinion: 7 reasons to stop worrying and instead stick with stocks
By Jeff Reeves
Published: Apr 11, 2018 8:34 a.m. ET
Look at strong earnings, a strong IPO market, a lack of alternatives — plus you knew 2018 would be tougher than 2017
Mary Evans/TOUCHSTONE PICTURES / JERRY BRUCKHEIMER FILMS/Ronald Grant/Everett Collection
It’s hard to sugarcoat the stock market’s performance in March. It was undeniably a bad month for investors — and already we’ve seen signs that April may bring continued fireworks.
However, after a roughly 6% decline for the S&P 500 (SPX, -0.41%) from highs in late February, most folks have been acting like all hell has broken lose.
It hasn’t.
…
if the current PE of the S&P is 17? then it hasn’t
It’s only about 100% overvalued compared to long run averages. I realize it’s different now, and we’ve entered a new era where historic norms no longer apply, etc.
Current: 31.54 -0.04 (-0.14%)
10:30 am EDT, Wed Apr 11
Mean: 16.85
Median: 16.15
Min: 4.78 (Dec 1920)
Max: 44.19 (Dec 1999)
Shiller PE ratio for the S&P 500.
a slowdown around September at the 1,450 older units he owns
so it’s not just the uber luxury apartments
or canadah
or london
there are a ton of 10-50 unit complexes in the Seattle area. If the new expensive downtown and SLU mega buildings (200 unit+) get filled up, this will create some level of vacancy in these older buildings - and eventually lower rents.
“For prospective renters on the hunt in San Francisco, there’s even more good news: Certain pockets of the city were seeing rents drop by double digit percentage points in March. The asking price for one-bedrooms in Cole Valley was down 14 percent in March and Inner Richmond prices fell 11 percent compared to a year earlier, according to apartment listing site Zumper.”
How can investors hope to sell at insanely overvalued prices when rents are dropping at double-digit rates?
Methinks someone got stuccoed.
Millennials are broke
…. and every homeowner upside down.
‘Rivage is only 60% full after being on the market for over a year’
A whole pack of people who thought they were retiring, ain’t.
And mighty Atlanta has turned:
‘Fundamentals could be poised to only worsen in the coming year as a supply of more than 8,000 new units is slated to hit the market, outstripping aggregate demand overall, Haddow & Co. Vice President Ladson Haddow said. ‘There’s a lot more units out there for people to choose from than there was a couple of years ago, especially the high-rise product,’ Haddow said. ‘It’s not all doom and gloom because the market is strong, [but] there’s a whole other wave coming. We’re going to deliver more units in the next 12 months than we have, to date, of any 12-month period before.’
Well Ladson, you’re right. It’s not gloomy at all for the vultures who will pick your clients bones clean.
Atlanta is a really bad place to build luxury high-rises. Older starter SFH in the Atlanta suburbs are $150K. That’s half the price of a DC-equivalent.
Here’s a new build for under $800/month:
https://www.zillow.com/community/ravenwood/2094115031_zpid/?fullpage=true
Why rent when you can buy for half the monthly payment?
Wow, that actually looks like a pretty good deal. Where we live, something like this would be about $275k.
That is ghetto adjacent. Plus as a bonus planea taking off and landing right over you 20 hours a day. ATL’s runways are right next door.
If the house were free I wouldn’t move into it.
Good to know. I guess that explains it.
That’s a new build, but there are plenty of sub $200K homes in the better burbs. For some reason Atlanta prices seem sane.
In ATL if you want your commute to be less than 1.5 hrs and not be shot at, you’re going to drop a min of $300k plus $50k-$60k in improvements just to be livable……Sane??? Sure, compared to coastal living and larger cities but then again avg wages are much lower here and the summers suck…..Plus the trees are trying to kill us here with a daily pollen count of over 5,000
Check the white count
“And mighty Atlanta has turned:”
Not just Atlanta. There’s falling prices in every major city.
Boston, MA 02114 Housing Prices Crater 21% YOY
https://www.zillow.com/boston-ma-02114/home-values/
https://snag.gy/m5EzRB.jpg
Megabank, Inc seems to be going all in on subprime auto loans. Will they be able to cop a bailout when this latest dodgy lending scheme collapses in the next recession?
I find it surprising that someone is buying these auto loans. I thought that Dodd-Frank forced originators to keep 5% of those auto loans, but maybe not?
Banks won’t be able to cop a bailout for auto loans. But money is fungible. They’ll lose money on the cars, use the profits from the mortgage division to backstop the cars, and then ask for a bailout to prop up the failing mortgage division. Because it’s ok to repossess a Tundra, but not to throw kiddies onto the sidewalk.
FYI, seeing lots of shiny new trux on the roads. New trux are all Toyotas, but the beaters are all Big 3.
Get up before sunrise and all the trucks on the road are GM and Ford, guys going to work who need a truck for their jobs. Later on the Toyotas start showing up. I don’t know who’s driving all of those nice shiny Toyotas, but I bet they’re just as likely to drive a Prius as their next vehicle.
Tundra drivers work at desk jobs, and there’re a lot of those around DC.
“Tundra drivers work at desk jobs, and there’re a lot of those around DC.”
Hmmmmm … what to people who work around tundras drive?
Does a desk jockey feel more, er, manly working at a desk if what he drives has a rugged outdoorsy sounding name?
Bet he does. Bet it’s a subliminal selling point. Bet not many Tundras would be sold if they were named something along the line of, say, a Daffodil.
Toyota trucks cannot handle work. They will fall apart in short order. All of the metal is super thin and the frames rot out in as little as a few years back east. Google “Toyota frame rust” and prepare to be horrified.
I don’t know who’s driving all of those nice shiny Toyotas, but I bet they’re just as likely to drive a Prius as their next vehicle.
Heh. One of my co-workers drives a nice shiny Tundra, and wifey’s car is indeed a Pious. (yeah, they’re called “Piouses.”)
“Pious”
They smell of smug (South Park).
“Get up before sunrise and all the trucks on the road are GM and Ford, guys going to work who need a truck for their jobs.”
The guys with the ladder rack, tool box, etc., spending $80 to make $100.
In my neck of the woods you don’t see many Toyota or Nissan pick ups. Mostly Ford and Chevy/GMC, with a few Dodge Rams tossed in for good measure.
Redmond, WA Housing Prices Crater 10% YOY As Seattle Area Rental Rates Plunge
https://www.movoto.com/redmond-wa/market-trends/
Palmetto?
4chan dot org /pol/
‘There are some apartment buildings in town sitting vacant because the owners don’t have anyone to manage them, according to Realtor Kassie Gorder. With those in use, apartment occupancy could be lowered to a rate of about 80 percent. She said the owners had listed them for sale a while back but no buyers could be found. Now that they’re vacant, finding a buyer could be even harder.’
When the poo hit the fan up there, a bunch of new or not even finished apartment complexes got hammered. I’m guessing these are probably the vacant places. Of course, old or new, they’re in foreclosure now.
‘Trying to separate yourself from a luxury standpoint is getting harder,’ says Joel Andersen, the developer behind the $46 million Q21 apartments in Slabtown. ‘The cost of everything has escalated so high.’
Yes it is Slabtown Joel, and because you are cash flow negative, you are having to dig into your pocket every month to cover it.
‘The oversupply issue is expected to go away soon.’
I got 5 bucks that says it won’t.
http://liveq21.com/
Amenities
24/7 package availability
Outdoor Community Courtyard for games and a social gathering area
Community Gas Grilling Area
Relaxing gas fireplace in courtyard
Business Center
Urban community lounge with full kitchen and fireplace.
Bike parking with fix-it station
Resident reserved parking garage
24/7 fitness studio
Wifi in common areas
On-site management and maintenance
Storage locker rentals
Walk score of 94
Pet Friendly Community
Move-in Coordination
Housekeeping Service Arrangements
Dry Cleaning Service
1st Floor retail including restaurants, Industrial Barre, and Root Whole Body health center
From hand-curated retail conveniently located right downstairs, to features designed to meet every need, Q21 cultivates community from the inside out.
The “cost of everything” hasn’t escalated at all. In fact materials, lot and labor are lower today than 20 years ago. The difference? The fraudsters and unsophisticated are attempting to earn a profit on residential housing using other peoples money.
I’ll wager he’s paying more for materials than the typical cash customer at home cheapos estimator desk.
I mean the amenities. 24/7 cash down the drain.
This reminds me: isn’t there a big shortage of airboxes in Portland? Guess not.
Well I was born in a Slabtown
And I can breathe in a Slabtown
Gonna die in this Slabtown
Community Gas Grilling Area that’s prob’ly where they’ll bury me
Hey!
John Mellencamp - Small Town
https://www.youtube.com/watch?v=0CVLVaBECuc
Denver, CO 80210 Housing Prices Crater 8% YOY
https://www.zillow.com/denver-co-80210/home-values/
*Select price from dropdown menu on first chart
Poor baby Elon…
“With Tesla’s Model 3 production behind, Elon Musk is so busy he doesn’t even have time to go home and shower. And he’s sleeping on the floor of the factory.”
https://www.cnbc.com/2018/04/11/elon-musk-says-he-is-sleeping-on-tesla-factory-floor-to-save-time.html
I wonder if that will appease the short sellers?
“More investors are betting against electric-car maker Tesla than any other U.S. stock, new data show…”
https://www.cnbc.com/2018/04/11/tesla-is-the-biggest-short-in-the-us-stock-market.html
I dunno… I’m impressed that he’s really there, doing the CEO thing. Sometimes, with all the press junkets and news stories of multiple houses and parties, it’s hard to believe that these high-power executives do any actual work. So good on Elon.
Yes, this. I don’t like Tesla’s chances but Elon seems to be much more worthy of tech-respect than the likes of Zuckerburg, Cook and the Alphabet crowd. I think Elon’s suffering from a little NIH-ism; heavily-automated assembly lines have been solved as a problem class for some time now. You just have to cough up the coin to engage the right engineers, who are mainly contractors.
Deciding on whether to buy a Model 3 right now or just wait a bit longer to see if there are some good deals on a used Model S. Tresho telling us about sleeping in the back of his pickup after long ER shifts made me realize that a climate controlled Model 3 might be great after back-to-back-to-back shifts out in Vegas if I travel there to work in ICU or critical care. The calculus on this is that I don’t have to pay for a hotel room or an AirBnB when I am on the road working at a hospital. Showers and cafeterias are always in every hospital. Decisions, decisions.
On a lighter note, 5 days ’til Patriot’s Day. Boston here I come!
Boston here I come!
I lived there for 18 months after college. More interesting people, by & large, than anywhere else I’ve been. Took a conference in Jan. 2017 in Norwood MA & found that is still the case.
Falling prices were anticipated and forecasted since 90%+ of all mortgages since 2007 are subprime.
San Diego, CA 92037 Housing Prices Crater 9% YOY
https://www.zillow.com/san-diego-ca-92037/home-values/
*Select price from drop-down menu on first chart
ecsrow is proceeding on schedule my friend.
Housing DumpsterFire…. Housing.
Paso Robles, CA Housing Prices Crater 11% YOY
https://www.movoto.com/paso-robles-ca/market-trends/
with realtor fees and closing costs im in the hole 8%.
dude, resist
just 12-18months and the big recession starts again
so close
Realtors are liars.
Signing off in Region IV
lowest since 2015. Photograph: Bloomberg via Getty Images
House prices in London are falling at the fastest rate in nine years, according to Halifax, Britain’s biggest mortgage lender.
Prices in the capital were down 3.2% between January and March compared with the previous quarter, the sharpest decline since the depths of the financial crisis, according to regional data collated by IHS Markit and published by Halifax, part of Lloyds Banking Group.
London also recorded the sharpest fall in annual house prices since the start of 2011. Property values fell 3.8% in the first quarter from a year ago, following a 0.7% annual drop in the fourth quarter.
There was a small annual increase of 0.3% in prices in the south-east of England at the start of the year, and a rise of 1.9% in the south-west.
Prices grew strongly elsewhere in the country. The east Midlands and East Anglia recorded the fastest rates of annual price inflation, at 7.3% and 7.2% respectively, followed by Scotland at 6.7% and Yorkshire and the Humber at 6.1%.
https://www.theguardian.com/business/2018/apr/12/london-house-prices-falling-fastest-rate-nine-years-halifax
lending standards have fallen off a cliff.
banks desperate to make loans to howmuchamonthers.
can anyone help me find these ETFs?
STAG- mild stagflation fund
RERE- re reflation fund
SUCK- it’s probably going to sck as gop blows it yet again and the BIG spnd looms BIGly
The Housing Bubble Blog….. Serving up crow, CraterTaters and the finest cuts of Filet O’ Rage since 2004.
66$ oil and higher gas going into drive season should solidify the flation part of the STAG ETF
GAS is a big bite in those big pickup trucks
S&P 500 PE
past year
24.63
current w earnings looking forward
16.88