The Housing Bubble

A report from The Oregonian. “Portland’s housing market is showing signs of relief for would-be buyers. The inventory of homes on the market climbed in May. Fewer bidding wars broke out, and price growth has slowed. But it’s a tale of two markets, brokers say. While the top of the market is cooling off, there’s still stiff competition over homes that are affordable to first-time buyers. New numbers from the Regional Multiple Listing Service show there were 5,380 homes on the market at the end the month, the most of any May since 2014. Sales, however, are falling. The listing service said some 2,800 homes sold in May, a decline of 3.2 percent compared to a year ago.”

“Homeowners looking to sell, having watched the red-hot run of recent years, are still adjusting to the slower gains. Some are overly aggressive in pricing their homes, which can backfire if you have to drop your price, said Dustin Miller, a broker with Windermere Realty Trust in Lake Oswego. ‘If the buyers see you do a price drop, now they think your price is flexible, especially if you’ve been on the market for a long time,’ Miller said.”

From The Globest on Illinois. “Prices steadily increased last month throughout the metropolitan Chicago housing market, an echo of the numbers recorded in May 2017, RE/MAX reports. But the firm also found that the market has essentially split in two, and the luxury market has a very different story than the one for more affordable homes. ‘There is an extraordinary amount of inventory for luxury homes,’ Paul Wells, a real estate expert with RE/MAX in Barrington, IL, tells GlobeSt.com. But few moderately-priced homes, meaning those costing less than $550,000, are hitting the market.”

“The number of homes selling for $550,000 and above increased by 60 units, or +4.7%, while inventory in those categories now range from a 5.1-month supply to as high as a 25-month supply. ‘I still believe the average person is not comfortable with the economy,’ Wells adds. And many are also reluctant to put their homes up for sale. The lack of moderately-priced homes has in some ways become a vicious circle as many feel they won’t find a replacement home. Furthermore, ‘there is very little new construction.’ Still, ‘it’s all very good for homeowners, because it’s driving up prices.’”

From The Real Deal on Florida. “A member of the Soffer family is suing the development group behind The Ritz-Carlton Residences, Miami Beach over the condominium project’s construction delays, and is looking to get her deposit back. It’s the fourth lawsuit filed by buyers in the last four months, all seeking a refund of deposits due to delays. Marsha Soffer filed suit in Miami-Dade County Circuit Court last month against the development group, 4701 North Meridian LLC, which is a partnership between Ophir Sternberg’s Lionheart Capital and Elliott Management Corp. Soffer is alleging breach of contract and is seeking a refund of her $2.52 million deposit.”

“‘Basically, we want our deposit back,’ said Soffer’s lawyer David Haber. ‘They (the developer) didn’t and couldn’t deliver.’”

The Loudoun Times in Virginia. “Average sale prices were flat but overall home sales activity increased by 5.7 percent year-over-year in May, according to an analysis of the Loudoun County real estate market. New listing activity decreased in May versus last year (-5.8 percent) as Loudoun County added 1,035 new homes to the market. The erratic change in new listings from month to month signals little long-term relief from the market’s consistently low home supply. Overall price growth continued to stagnate in May as median sale prices were identical to last month and May 2017 at $475,000.”

“Great Falls’ 22066 remains the county’s zip code with the highest median sales price continues at $915,000, despite declining 8.0 percent from May 2017. For the second straight month, Sterling’s 20165 saw the largest decline in median sales price from the prior year – declining 13.9 percent to $450,000. Sterling’s 20164 continues as the county’s least expensive zip code with a median sale price of $386,500 in May.”

The Sun Advocate in Utah. “1,806. That number got quite a bit of attention among area Realtors. It was tucked into a recently released economic development report produced by Lewis Young Robertson & Burningham on behalf of Carbon County. It supposedly reflects the number of vacant housing units in Carbon County, amounting to nearly 20 percent of all homes in the area. One reason the statistic worries Realtors is because they believe it could negatively impact the market, which has seen increasing values lately.”

“‘We were up a lot from 2016. We had a really busy market in 2017,’ said Balynda Scovill, president of the Carbon-Emery Board of Realtors. ‘Values didn’t go up a ton, but they did go up a little bit. Our days on market went down.’”

“A look further shows the Census Bureau reported similar numbers for other years. In 2016, for example, it reported the number of vacant homes in Carbon County was 1,861. In 2014, it reported 1,752 vacant homes. In 2013, it was 1,773; and, in 2012, 1,768. First quarter home sales and listings provided by Scovill indeed reflect the strongest first quarter in more than five years. The activity suggests everyone should disregard what the Census Bureau is reporting. It just isn’t true.”

The Daily Independent in California. “The Ridgecrest Police Department got together with concerned citizens, including many realtors and contractors, to discuss strategies and options for dealing with abandoned properties in Ridgecrest. Asked how many abandoned houses and buildings there are in Ridgecrest, Chief Jed McLaughlin replied ‘there’s a ton.’”

“McLaughlin said RPD can help find property owners and their current addresses. Several realtors seemed happy to hear this. Many agreed that many of the properties in question tend to be owned by investors who do not live in Ridgecrest. ‘Have you guys found that its difficult even when you do find the people? Are they not willing to talk? Not willing to sell?’ McLaughlin asked. ‘Or do they just want so much money that its not worth it?’”

“‘All of the above,’ someone said with a laugh.”

From News.com.au on California. “The glittering Lake Merritt is a popular spot with affluent families, surrounded by luxury homes and the expensive offices of major tech companies. Just a few blocks away, people living in squalid tents are begging the local authority workers to stop throwing their battered possessions into garbage trucks, as the police calmly look on. This is normality in Oakland, California, one of the most dangerous cities in the Golden State and victim of a rapidly widening wealth divide created by Silicon Valley.”

“One in 12 people in Oakland was at risk of falling victim to a crime in 2017, and the city has a higher murder rate than troubled San Francisco, with 20 reported homicides per 100,000 individuals, as well as 65.2 rapes, 723.8 robberies, and 616.7 aggravated assaults for every 100,000 people in 2016. While the city has improved its crime rates in recent years, the majority of the top 10 most dangerous Californian cities are satellite towns close by — Stockton, Modesto, Vallejo, Richmond.”

“‘Rental costs have tripled in the last few years in the Bay Area,’ Mission for the Homeless director Michael Meadows tells news.com.au. ‘The gap between the rich and the poor continues to widen.’”

“Housing is so expensive in the San Francisco Bay Area that even most people who work at a full-time job can’t afford the rent,’ says Heather Freinkel, Managing Attorney at the Homeless Action Center. ‘Rent for a one-bedroom apartment is $2000 [$A2686] a month. That means that people who are retired, those with disabilities, and families with children can’t afford market rate housing. There is a great deal of construction going on, but it’s all to build more market-rate, expensive luxury housing.’”

“‘We are seeing families lose homes that they have owned for generations due to foreclosure or predatory developers who buy at a low price, do some superficial remodelling, and ‘flip’ or sell the property soon after to make hundreds of thousands of dollars in a time-span of three to six months.’”