July 16, 2018

Overly Optimistic Sellers And Buyer Fatigue Have Converged

A report from USA Today. “The housing market may be starting to benefit from the one thing that can loosen a long-running squeeze that has crimped sales and driven up prices: more homes. The nation’s housing inventory increased 12.2 percent in the second quarter, the biggest gain since early 2015, according to Trulia. The Nashville, Tennessee, area led the nation in the second quarter with a 52 percent jump in homes on the market compared with a year earlier, Trulia figures show.”

“‘There has been some more inventory,’ says John McClanahan, a broker for Village Real Estate in Nashville. As a result, he says: “Prices have been really stable the last few months. Things are a little slower. You’re not seeing as many multiple offers. There’s not as much of a frenzy.’”

“Other top metro areas with big inventory gains the past year include Salt Lake City (48.6 percent), Dallas (32.4 percent), Washington, D.C. (21.9 percent), and Little Rock, Arkansas (13.4 percent), according to the Trulia data. Inventory increased 1.1 percent in New York City, 2.9 percent in Los Angeles, 3.1 percent in Miami and 22.1 percent in San Diego.”

From Deseret News in Utah. “A recent survey of Utah business leaders reveals a healthy level of confidence in the current economy, but less bullishness when it comes to the near future. Wages are not keeping up with the cost of living, particularly when it comes to housing. Since 1991, housing prices have risen faster than household income by a factor of 10.”

The Sacramento Bee in California. “Sacramento’s home sales market has slowed, offering a touch of good news this summer for buyers. With few homes on the market, sellers still have the upper hand, but the tide is turning, new data suggest. The median price of existing Sacramento County home sales in June leveled off at $375,000, the same as the median in May. For the first time since early this year, less than half of sellers got multiple offers. More sellers have had to lower their asking price to make a sale.”

“There were 1,767 home-sale escrow closures in the county in June, two percent more than May, according to the Realtors association. But homes with pending sales in June were down 17.5 percent from May, suggesting the summer cooling season had begun. More homes were on the market, though, in June, at 2,660 than were in May, when 2,509 were up for sale. The average price per square foot of homes sold in the county in June was $240, down two dollars from May.”

The Mercer Island Repoerter in Washington. “What a difference a couple of months can make in the housing market. In May, inventory levels were still at record lows and many homes were getting multiple offers.With the median house price at $812,500 in Seattle and $978,000 on the Eastside, we are at a tipping point where record-high home prices, overly optimistic sellers and buyer fatigue have converged. The total inventory of homes listed for sale has now grown for three straight months on a year-over-year basis, suggesting a new trend. Redfin data showed 32 percent of homes across the region had price drops last month, up from 27 percent a year ago and the highest for any June since the company started tracking in 2012.”

“What does this mean for sellers and buyers? Sellers need to be more realistic about the value of their home and shouldn’t expect to get multiple offers or offers with Escalation Clauses significantly over the asking price. Buyers will likely have more homes to look at in their preferred price range and area and may encounter less competitive multiple-offer situations.”

From The Real Deal on Florida. “A proposal to build 360 affordable and workforce housing apartments in Overtown near Miami Worldcenter and Brightline’s MiamiCentral development is gaining traction. Miami-Dade commissioners unanimously approved negotiating a deal with Atlantic Pacific Communities to develop a $172.8 million mixed-use project with a total of 600 residential units. In the company’s application, Atlantic Pacific COO Kenneth Naylor boasted Block 45 would help level the disparity in Miami’s downtown, which is oversaturated with condos and apartments that a majority of city residents cannot afford.”

“‘Thousands of expensive luxury units have been and will continue to be, delivered into this marketplace, forcing much of our workforce out of this community,’ Naylor wrote.”

From The Real Deal on New York. “Prices keep sliding in the Manhattan rental market as concessions remain rampant. The net effective median rental price of $3,314 in June was down 2.8 percent year-over-year, according to Douglas Elliman’s latest market report. That’s the sixth year-over-year decline in seven months. Median face rents also fell 2.9 percent over last year to $3,400.”

“‘It’s definitely been consistent over the past couple of months,’ said Hal Gavzie, executive manager of leasing at Elliman. ‘It’s all tied to just all the supply. There’s just a lot of product out there.’”

The Morning Call in Pennsylvania. “There is no denying that downtown Allentown today is in better shape than it has been for many years. One of the most intractable issues facing the neighborhoods is their high percentage of older rental properties. More than 86 percent of the houses in the neighborhood are now rental properties, up from about 83 percent four years ago. That’s far more than the 55 percent citywide. Vacant and decaying properties also remain an issue. Nearly 20 percent of dwellings in the neighborhood were vacant, according to the 2016 data, about the same as it was four years earlier. Again, the problem is much less of an issue across the city as a whole, where the 2016 vacancy rate was 9.5 percent.”

“Mark Zartler, a landlord of nearly three decades downtown, said the main problem he saw four years ago and again these days is out-of-town landlords who don’t keep their properties presentable. ‘One of the biggest gripes I have is people don’t take care of the outside of their buildings,’ Zartler said. ‘I mean, I am constantly calling the city about trash.’”

From New Jersey 101.5. “As we move further away from last decade’s housing crisis, its lingering impacts on the real estate market are dwindling. But the Garden State still can’t escape its role as the No. 1 state in the nation for the percentage of properties in the foreclosure process. The foreclosure rate was higher in New Jersey than in any other state in the first half of 2018, the second quarter of 2018, and the month of June, according to Attom Data Solutions.”

“Through the first six months of the year, foreclosure filings hit 26,667 New Jersey properties — one out of every 125. Forty-seven percent of New Jersey’s foreclosures are linked to loans that originated between 2004 and 2008, the data show. ‘I do think that it can’t be blamed anymore on just the legacy foreclosures,’ said Daren Blomquist, senior vice president for Attom Data Solutions.”

“In the Atlantic City region, the foreclosure rate was a whopping 8.6 percent on FHA loans that originated in 2014.”




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140 Comments »

Comment by Ben Jones
2018-07-16 07:42:35

Oh dear…

‘In the Atlantic City region, the foreclosure rate was a whopping 8.6 percent on FHA loans that originated in 2014′

‘The total inventory of homes listed for sale has now grown for three straight months on a year-over-year basis, suggesting a new trend. Redfin data showed 32 percent of homes across the region had price drops last month, up from 27 percent a year ago and the highest for any June since the company started tracking in 2012′

Some sad pandas at Redfin. I guess they capitalize escalation clause up there.

Comment by jeff
2018-07-16 08:19:33

‘In the Atlantic City region, the foreclosure rate was a whopping 8.6 percent on FHA loans that originated in 2014′

Ain’t that a kick in the nuggies.

 
Comment by Larry Littlefield
2018-07-16 12:22:21

Atlantic City has particular issues with the collapse of its leading industry, casinos.

But it may also have a link to foreclosures in the rest of the state. How many did cash out refis and gambled the proceeds in Atlantic City?

The casino industry has been struggling since 2008.

Comment by Ben Jones
2018-07-16 12:25:08

‘particular issues’

Why is the same thing happening with these FHA loans in California, Texas, Arizona, Florida and North Carolina?

Comment by GuillotineRenovator
2018-07-16 13:48:02

Crickets…

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Comment by Professor 🐻
2018-07-16 13:53:40

Same housing market casino gambling industry, different states…

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Comment by Oxide
2018-07-17 03:49:07

They gambled on boats and boob jobs instead of craps. Effectively no different.

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Comment by Ben Jones
2018-07-16 07:45:33

‘A recent NBC Bay Area investigation went viral after exposing an alarming amount of trash, drug needles, and feces scattered across San Francisco. The report centered around a 153-block survey of downtown San Francisco, which revealed trash on every block, 100 needles, and more than 300 piles of feces along the 20-mile stretch of streets and sidewalks.’

‘San Francisco Mayor London Breed, in her first one-on-one interview since taking office, said homeless advocacy groups that receive funding from the city need to better educate the homeless to “clean up after themselves.”

‘On Friday, two days after Breed’s inauguration, the new mayor during an afternoon stroll saw firsthand the reality and challenges of the city. Video recorded by NBC Bay Area shows a man prepping a needle as Breed walked by.’

“I will say there is more feces on the sidewalks than I’ve ever seen growing up here,” Breed said. “That is a huge problem and we are not just talking about from dogs — we’re talking about from humans.”

Klassy with a K.

Comment by Mr. Banker
2018-07-16 07:56:21

“When pressed about whether her plan calls for harsher penalties against those who litter or defecate on city streets, Breed said “I didn’t express anything about a penalty.” Instead, the mayor said she has encouraged nonprofits “to talk to their clients, who, unfortunately, were mostly responsible for the conditions of our streets.”

I love this blog.

😁

Comment by rms
2018-07-16 08:34:46

“…their clients…”

How does China serve their “clients” needs?

 
Comment by Ben Jones
2018-07-16 08:44:53

You know you live in a world class city when the mayor can readily distinguish between animal and human poo.

Comment by Apartment 401
2018-07-16 09:06:27

This is the “fundamental transformation” you were promised.

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Comment by usurper
2018-07-16 14:42:23

Feces and needle sharing story went viral? Wait til things really go viral, if ya know what I mean.

SF’ers know a bit about viruses.

 
 
Comment by Mr. Banker
2018-07-16 09:25:39

“The law in San Francisco is clear: You must clean up after your dog.”

https://www.nytimes.com/2011/02/11/us/11bcjames.html

Whatever.

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Comment by Mugsy
2018-07-17 00:57:51

No one ever is to blame.

 
 
Comment by Prodigal Son
2018-07-16 09:13:51

Human feces, the new San Francisco treat.

Comment by Ben Jones
Comment by Prodigal Son
2018-07-16 09:34:32

Moldy Mole Poop is the most confusing.

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Comment by Albuquerquedan
2018-07-16 11:30:11

I guess if it is vegan, the left will be ok with it.

 
 
Comment by jeff
2018-07-16 09:46:20

The NBC Bay Area story says the Mayor plans to open Supervised Injection sites Hoping to open 2 by July.

My question, what does an Injection Supervisor get paid?

What is the training?

Comment by Mr. Banker
2018-07-16 10:02:43

Linkie …

http://www.ktvu.com/news/safe-drug-injection-sites-in-san-francisco-expected-to-open-in-july-be-first-in-nation-reports#/

(snip)

“There are an estimated 22,000 IV drug users in San Francisco, and 100 injected drug overdose deaths a year in the city, according to Board Supervisor London Breed, who pushed for the centers and was on the SF Safe Injection Services Task Force.”

 
Comment by Ben Jones
2018-07-16 10:03:47

I don’t know, but this edgy urban living is almost irresistible.

‘A Miami Beach man upset with his Jewish neighbors after he was evicted from his condo reportedly vowed to burn down the building with “all the f***ing Jews.”

‘CBS4’S Peter D’Oench spoke with Luis Diaz who alerted authorities at the condo about a conversation he had with Stolper. “He told me he was tired of the association and the Jews in the building and he wanted to do something about it. He said he wanted to burn down the building. At first, I didn’t think he was serious but then I heard him talk about blocking the fire department and their hoses I realized he was serious and I had to do something,” said Diaz.’

https://miami.cbslocal.com/2018/07/13/man-plotted-to-burn-down-condo-kill-all-jews/

From the comments:

‘This is an example of the state of journalism: Why did the condo association throw the guy out? Was it a legitimate reason? It’s like the author couldn’t wait to post the headline and didn’t think the story made any difference. Incompetent journalist’

‘OK. THE HOA would normally not throw a guy out. THey talked about him renting from the Owner of the unit. We have people that are not happy with our HOA association. They attempted to tell lies about the board to change the board. BUt it failed. No one wanted to face the challenges the board faces every year to keep everything covered and paid for.’

‘So, is there a unit available at a reasonable price?’

‘I was there. He was hot and thirsty. He said he wanted to “Chill all the juice.”

Comment by Ben Jones
2018-07-16 10:19:15

‘him renting from the Owner of the unit’

Note the capitalization of “Owner”.

‘No one wanted to face the challenges the board faces every year to keep everything covered and paid for’

Trouble in paradise?

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Comment by Anonymous
2018-07-16 11:17:45

How is that California secession drive going? The sooner this state in general, and SF in particular, leave the union, the better. And I was born and raised in the state.

Comment by GuillotineRenovator
2018-07-16 13:50:55

Nah, just need to kick the commies out and reinstate the rule of law.

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Comment by Anonymous
2018-07-16 16:27:28

Sounds easy enough, but good luck doing it.

 
 
 
Comment by taxpayers
2018-07-16 11:45:48

more than you when you count the benefits

53% for gov workers

 
Comment by GuillotineRenovator
2018-07-16 13:52:08

“The NBC Bay Area story says the Mayor plans to open Supervised Injection sites Hoping to open 2 by July.”

It’s for the children…

 
 
Comment by Prodigal Son
2018-07-16 10:06:38

I wonder what the mayor would say if a homeless person were squatting bare-assed on her living room carpet?

Comment by GuillotineRenovator
2018-07-16 13:53:16

“Front to back?”

 
 
Comment by tango_uniform
2018-07-16 15:56:47

So, about 118 yards per turd. Maybe this can be one of the metrics used when scoring a town’s “walkability”?

 
Comment by MIke in Carlsbad
2018-07-16 22:50:19

But the plastic bag ban was so necessary, now we just have a different plastic bag manufacturer, and the homeless no longer crap in the free bags, but on the street. Soon all cities will be like downtown San Diego with Hep A running rampant through the streets.

 
 
Comment by Mortgage Watch
2018-07-16 07:46:13

Delray Beach, FL Housing Prices Crater 14% YOY As Claims Of Bidding Wars Proven False

https://www.zillow.com/delray-beach-fl-33446/home-values/

*Select price from drop down menu on first chart

 
Comment by Ben Jones
2018-07-16 07:49:31

‘Fairfax housing sales down, contracts up, prices level’

I saw this article in a couple of places. It’s the usual UHS happy talk, silver lining stuff. But the graphic says:

Arlington County median down 16%. Alexandria City median down 4.38%. I guess they didn’t notice.

Comment by taxpayers
2018-07-16 08:02:40

nvar.org has some stats

22151 rockin, but I’m pretty sure the buyers and mba types

 
Comment by Mafia Blocks
Comment by Anonymous
2018-07-16 09:00:07

Sum Ting Wong ?! :D

 
 
Comment by Oxide
2018-07-17 03:54:56

Maybe because sales have shifted more toward lower priced condos instead of high price SFH? I don’t know; I don’t have my computer to look it up.

 
 
Comment by Mr. Banker
2018-07-16 07:58:45

“Since 1991, housing prices have risen faster than household income by a factor of 10.”

😁

Comment by Professor 🐻
2018-07-16 10:23:38

The trend is clearly unsustainable. The question is not whether, but how and when it will resolve.

Comment by azdude
2018-07-16 13:14:09

ca housing generally always goes up. It is the new gold rush.

 
Comment by GuillotineRenovator
2018-07-16 13:54:58

There’s one thing you can count on - the Fed and .gov to point a liquidity firehose at housing.

 
 
 
Comment by Mortgage Watch
2018-07-16 08:16:29

Arlington, VA Landlords Slash Rental Rates 11% YOY To Offset Rising Property Taxes As DC Housing Market Tanks

https://www.zillow.com/arlington-va-22209/home-values/

*Select Price from dropdown menu on rental chart

 
Comment by Apartment 401
2018-07-16 09:03:56

Realtors are liars.

Comment by Ben Jones
2018-07-16 09:20:30

‘According to the basics of supply and demand, it is clear that Clark County is suffering from a housing shortage. Home prices have surged, vacant apartments are almost non-existent, and local builders say there is not enough available land for housing construction.’

http://www.columbian.com/news/2018/jun/19/in-our-view-we-need-places-to-live/

From the comments:

‘There are hundreds of vacant homes around the county (5 of them are in my neighborhood) that are doing nothing but sitting and rotting. These are houses that have been repossessed by the big banks who seem to have little interest in selling them. I seem to recall that Portland found a way to take ownership of their “Zombie Houses” in order to repurpose them or the land they sit on. Would that not be a worthwhile goal for Clark County as well? Not only would it provide more available homes but it would also eliminate the eyesores that attract illegal activities.’

Comment by GuillotineRenovator
2018-07-16 13:57:51

There are tens of millions of vacant houses in ever city, town and podunk location across this massive country. The real question is why nobody in the media is talking about it. It’s a giant scam - collusion by the Fed, banks and the government.

Has there ever been a time in history where governments have worked so hard to impoverish the people, actually withholding shelter from them leading to homeless populations the size of small cities?

 
 
 
Comment by Ben Jones
2018-07-16 09:21:52

‘The Nashville, Tennessee, area led the nation in the second quarter with a 52 percent jump in homes on the market compared with a year earlier…Other top metro areas with big inventory gains the past year include Salt Lake City (48.6 percent), Dallas (32.4 percent), Washington, D.C. (21.9 percent), and Little Rock, Arkansas (13.4 percent), according to the Trulia data. Inventory increased 1.1 percent in New York City, 2.9 percent in Los Angeles, 3.1 percent in Miami and 22.1 percent in San Diego.’

Gosh, that shortage sure went poof fast!

 
Comment by Mortgage Watch
2018-07-16 09:33:05

Downtown Los Angeles, CA Housing Prices Crater 16% YOY As Crime Ravages Southern California

https://www.zillow.com/downtown-los-angeles-ca/home-values/

*Select price from dropdown menu on first chart

 
Comment by Ben Jones
2018-07-16 09:38:00

‘Atlantic Pacific COO Kenneth Naylor boasted Block 45 would help level the disparity in Miami’s downtown, which is oversaturated with condos and apartments that a majority of city residents cannot afford.’

‘Thousands of expensive luxury units have been and will continue to be, delivered into this marketplace’

So if you build hundreds more that are cheaper, the existing airboxes will be even more useless.

 
Comment by MGSpiffy
2018-07-16 09:46:08

/notes the ‘local’ paper in Ben’s list this morning.

As I’ve been noting for weeks now, the yellow lights of caution are popping up all around the Seattle area.

No one is willing to declare that the bubble has popped yet, but the brakes are being slammed on price appreciation.

The feedback loop is shifting into reverse.

Comment by Ben Jones
2018-07-16 10:08:05

‘the yellow lights of caution are popping up all around’

Like the thousands of empty, never-lived-in airboxes downtown?

Comment by b
2018-07-16 10:38:41

There is so much hype from the past few years that the ‘experts’ are slow walking the explanations back.

In trendy Belltown (1 mile from Amazon in SLU), i just saw a sign that said 6 weeks free for an apartment lease. Yes - they have been offering deals - but that was after you talked to them. This was blatant that i could see while driving on Western Av.

—-

Speaking of Western Av - on the other side of the Pike Place Market

How is it possible for a commercial building to go from $13M in June 2015 to $186M? Even if they extensively renovated - did they put in gold toilets?

Who makes up for this is a commercial real estate crash. I assume that the taxpayers will pay for this folly when they have to pay for the state teachers retirement fund.

“As Seattle’s Alaskan Way Viaduct replacement tunnel comes closer to reality, the real estate along the future unobstructed shoreline will inevitably become some of the most remarkable in the city. In June of 2015, when Boston-based Beacon Capital Partners paid $13.1 million, or just over $70 per square foot, for the 187,000 square foot vintage property, it was hoping that its investment would pay off handsomely as the company repositioned the asset and leased it up.
Now, just three years later, the State Teachers Retirement System of Ohio is in talks to purchase the property for $186 million, or $997 per square foot, according to a report by Seattle’s JLL office, which reported the sale in its first quarter of 2018 market report. The deal has not closed, yet, but Beacon Capital had listed the property as sold on its website.”

https://news.theregistryps.com/ohio-pension-fund-set-to-acquire-maritime-building-in-seattle-for-186mm/

Comment by GuillotineRenovator
2018-07-16 14:00:32

“In June of 2015, when Boston-based Beacon Capital Partners paid $13.1 million, or just over $70 per square foot, for the 187,000 square foot vintage property, it was hoping that its investment would pay off handsomely as the company repositioned the asset and leased it up.

Now, just three years later, the State Teachers Retirement System of Ohio is in talks to purchase the property for $186 million, or $997 per square foot, according to a report by Seattle’s JLL office, which reported the sale in its first quarter of 2018 market report.”

Fraud. Somebody needs to start questioning the Ohio STRS, and stat. This is how pensions go broke, quickly.

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Comment by MGSpiffy
2018-07-16 15:01:17

Someone paid off someone to commit fraud - the Ohio STRS is going to get hozed on that deal.

I have to imagine that it’s fairly common in state pension systems to lack oversight into their ‘investments’ - it’s going to get ugly over the next couple decades.

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Comment by b
2018-07-16 17:07:08

the question is — are the taxpayers still on the hook if the teachers union mis-invested the $s

 
Comment by MGSpiffy
2018-07-17 00:16:52

Probably they are… That’s how these things tend to work. Privatizes the bribes.. er .. incentives to make the portfolio deals, and socialize the losses years later after you’ve moved out of state.

 
Comment by Coleen
2018-07-28 18:56:44

It’s the state, not the union, in charge of the pension plan.

 
 
 
Comment by MGSpiffy
2018-07-16 15:14:11

Like the thousands of empty, never-lived-in airboxes downtown?

Yup. As I’ve been noting the past several weeks, the awareness of the slowdown is spreading rapidly around Seattle. On Nextdoor, Reddit, and other local media as well fact-to-face gossiping the word is raising eyebrows.

Apartments are clearly going to get fooked. Scratch that and move future tense to present tense. SFH sales are still happening, but it more and more depends on exactly and what and where and how much. And even for the ones still moving quickly, it’s letting the pent-up air out of demand balloon.

We talked before about graphing the price curve, velocity and derivatives. The prices are still inching up, but the velocity is faltering noticeably, and the derivative has gone negative. Will it stay that way and turn the boom into a decline? Seems more a question of when and at what rate than a question of ‘if’. Wild cards still exist in the form of the Fed money hose, but don’t seem as likely as that used to.

Comment by Carl Morris
2018-07-16 16:12:34

The prices are still inching up, but the velocity is faltering noticeably, and the derivative has gone negative.

So you’re saying we’re out of gas…

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Comment by b
2018-07-16 17:19:56

mgspiffy,

As mentioned above, Friday was the first time that i saw a sign about free weeks (6) when signing a lease.

I have lived in belltown for 20 years - i have never seed that before

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Comment by MGSpiffy
2018-07-17 00:22:22

Indeed. the only slowdown I’ve seen was just after I moved here from Texas - living in an Apartment off 520 & 405 when the first Microsoft layoffs hit (’09?) - My rent was cut 10% without asking. Since then, it’s been an predictable engine of rinsing rents and low vacancies.

But now… there is a Tsunami of new units scheduled to be completed over the next 24 months, and that has to have the current operators looking over their shoulders. All that building started before Amazon announced HQ2, and that it wouldn’t be in Seattle. A lot of operators are sobering up.

When are we going to have the next Seattle HBB meetup? :)

 
Comment by b
2018-07-17 07:49:58

would love to grab beer or coffee. How many folks are in the Seattle area

 
Comment by drumminj
2018-07-17 17:24:17

How many folks are in the Seattle area

Myself, Prime, BlackSwanDive, MG…not sure who else?

 
Comment by rms
2018-07-17 17:28:25

How many folks are in the Seattle area

rms… Columbia Basin

 
Comment by redmondjp
2018-07-17 21:06:40

I’m in Redmond - would love to meet up as well.

 
Comment by Professor 🐻
2018-07-18 07:40:01

“rinsing rents”

Rinsing, followed by dry cleaning…

 
 
 
Comment by Mafia Blocks
2018-07-16 16:39:06

“Like the thousands of empty, never-lived-in airboxes downtown?”

http://www.businessinsider.com/seattle-apartment-market-faces-onslaught-of-new-buildings-2018-1

lol… From the article: “There is no housing shortage.”

 
 
 
Comment by Mortgage Watch
2018-07-16 09:54:03

Bothell, WA Housing Prices Crater 5% YOY As The Resounding Echo Of 2008 Correction Reverberates Across Seattle

https://www.movoto.com/bothell-wa/market-trends/

 
Comment by FB wants a do over
2018-07-16 10:12:53

US Housing Bubble enters stage 2

Stage One usually ends with price spikes in the hottest markets so extreme that they generate headlines. Like these:

San Diego home prices spike

Home Prices Spike Near Murrieta, SoCal Median Hits Record Level

Orlando Home Prices Spike 10 Percent Annually in April

Another month, another record for Denver home prices

Phase Two of a typical US housing bubble begins when sellers read these headlines and note that prices are now above what they could have gotten in the last bubble. With the memory of how badly, during the subsequent bust, they’d wished they’d sold at the peak still reasonably fresh, they realize that they’ve been given a second chance to cash out, move to a cheaper, less-frenetic place, and coast on their real estate riches. So they call a realtor and list their house. As do a bunch of their neighbors. Supply, out of the blue, jumps.

That may be what’s happening now:

https://www.dollarcollapse.com/us-housing-bubble-motivated-sellers/

Comment by Mafia Blocks
2018-07-16 10:23:50

“That may be what’s happening now”

There’s too little demand and too much inventory (and fraud) to accurately determine what’s going on other than falling prices.

 
Comment by Daz
2018-07-16 20:05:06

That’s what I did. Sold end of 2017 because I remembered I could of got out at top in 2006. Didn’t want the ride down again.

 
 
Comment by Professor 🐻
2018-07-16 10:17:58

“22.1 percent in San Diego.”

Unfortunately, 22.1 percent of a number near zero remains near zero. The good news is that it only takes a little over three such increases to double.

 
Comment by Mr. Banker
2018-07-16 10:42:58

1. Dumb ‘em down.

2. Profit.

The making of a Debt Slave …

“How am I going to pay $94,000 in Student Loan Debt?!?”

https://youtu.be/bY4lvA81IbA

Comment by Mr. Banker
2018-07-16 11:08:18

Here’s some more fun stuff …

“$300,000 in Student Loan Debt! Can’t Find A Career Job! My Tips Including My Career Struggle Story”

https://youtu.be/5mm1SrvPbnM

Comment by Albuquerquedan
2018-07-16 11:31:42

Put another shrimp on the barbie, Mr. Banker, your star student:

https://www.bloomberg.com/graphics/2018-australia-consumer-debt/

Comment by Anonymous
2018-07-16 12:03:47

“…“surprised” interest-only clients, who were unaware that their repayments are set to increase…”

Deja vu!

I’ve read that much of the value of the Superannuation fund (national pension scheme) is due to this run-up in property values.

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Comment by Anonymous
2018-07-16 11:30:16

$94K of student loan debt…but no degree. Then had to spend another $5K for a paralegal certificate so she could get a job.

 
 
Comment by Carl Morris
2018-07-16 10:46:37

For the first time since early this year, less than half of sellers got multiple offers.

Speaking of Sacramento, I accidentally ended up on somebody’s email list that sends out a report on the local area about once a month. It was interesting to note that prices are still at the peak and almost all the houses eventually sell (so far) but the average number of outstanding offers for each sale is now down to 1.0. IIRC it was near 3 when they first started sending me the reports.

So if that’s accurate at all I expect the cracks to start showing very soon.

 
Comment by wannabe
2018-07-16 11:22:27

Ok so riddle me this- why are Sacramento real estate prices still so SKY HIGH when most people work for the state that pays low salaries?

Comment by TIC TOK
2018-07-16 11:50:20

Low salaries? For CA gubmt workers? Shirley you jest. That is the land of $200k a year janitors, not to mention retiring at 53 with a $80k pension, while working a second career.

Comment by MIke in Carlsbad
2018-07-16 22:59:57

my next door neighbor is a special ed teacher in Vista, CA, he makes 85k/yr, summers off, pension, and just got tenure after being there 2 years. Bought a nice new 4×4 last week. I was surprised at how much teachers make in one of the worse school districts in San Diego.

Comment by rms
2018-07-17 00:22:33

“…special ed teacher…”

Ta-da!

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Comment by Professor 🐻
2018-07-18 07:42:07

You have to pay more for the same teaching credentials in a district where nobody wants to teach.

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Comment by Anonymous
Comment by cactus
2018-07-16 17:27:23

That’s about right . When I see a High-End Prevost RV driven by a 35 year old guy I think it must be a fireman or cop. Then I see the red fireman sticker on the back window.

That’s how they do in CA

Comment by Tarara Boomdea
2018-07-17 10:47:53

Old, but still apropos (NSFW, turn volume down.)

Fire Hero Gets Schooled

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Comment by Mafia Blocks
2018-07-16 12:23:39

To suppress housing demand? CA housing demand is at 21 year lows an falling.

http://journal.firsttuesday.us/home-sales-volume-and-price-peaks/692/

 
Comment by Taxpayers
2018-07-16 14:52:29

Add 53% in bennies

 
 
Comment by Bradford99
2018-07-16 11:31:25

I have followed this blog since 2005. I thought housing was expensive back then; and I’ve watched it go to the moon ever since.

I surprised myself when I made an offer on a house last week. It’s a quirkly little house that met all my criteria. It was priced at $935k. (It most recently sold in 2014 for $650k and the owners never lived in it, did zero work on it). ALthough it was overpriced, I can afford it. I decided that even if I lost a few hundred thousand on it, it would not ruin my life. Also, I would be selling stock to make the down payment, which is a bit of a de-risking in that regard.

I offered $836k, with the standard contingencies. Next day I noticed the owners dropped the price 60k, from 935 to 875. My agent says that my offer prompted the price decrease. The owners declined to respond to my offer (i.e. no counteroffer or whatever). Agent said, “If you had not had an inspection contingency, they may have accepted the offer.” He says they didn’t want their house to go pending and then maybe go back on the market if it failed the inspection.

That raises the huge question, “What is wrong with this house?!” Also, I can’t believe that in any real estate market, no matter how how, that people are making offers with no inspection contingency.

I let the offer wither on the vine. I’ll keep waiting.

May we live in interesting times.

Comment by Albuquerquedan
2018-07-16 11:45:27

Maybe you avoided buying a previous meth lab. Certainly, it does not pass the smell test

Comment by TIC TOK
2018-07-16 11:56:58

I think it’s more like sellers have been conditioned to have offers without any contingency so if one comes with a contingency they will dismiss it out of hand even if there’s nothing wrong with the house. The whole meth house thing has been way blown out of proportion it’s like people think there’s a meth house on every corner of the country. It’s like the so called opioid epidemic that didn’t exist like 18 months ago and now every 2nd American is hooked on pain pills. There are meth houses sure but I’m pretty sure none of them or exceptionally small number them are in the $900,000 range. Why spend that much on a house to turn it into a meth house when a $40k house works as well? This fear of buying a meth house by upper middle class white people is hillarious. The Breaking Bad effect I guess.

 
Comment by Bradford99
2018-07-16 11:59:46

interesting idea. I don’t think meth lab. but maybe something significant like that. Let me tell you a bit more history. Current owner bought in 2014, never lived in it. Prior owner purchased in 2013, owning it for less than a year before putting it back on the market. Current owners refused my offer because of the inspection contingency. I SMELL A RAT!!

Comment by cactus
2018-07-16 17:28:32

When was it built ?

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Comment by azdude
2018-07-16 13:12:50

u should make another offer without contingencies if you want the place. Where is it at? looks like bay area price.

 
Comment by MGSpiffy
2018-07-16 14:59:15

Bradford99,
I can see why you want the house - I find a lot of mid-century designs to be really enjoyable to live in, and the location seems reasonably quiet and peaceful.

I agree with you on the red flag over the inspection contingency. But.. are you sure that they actually rejected it for that reason? - your quote above makes it sound like the agent is just speculating.

Unless I knew that was a dealbreaker for the owner, I’d be tempted to tell your agent to go back to them in a week or so, and say something like “I think Bradford99 might be willing split the difference - Interested?” ( They’ve already give up 60K, there’s only 39K left to haggle over, which says they’ve accept the fact they are not going to get their wishing price).

I’ve been temped to disclose the listing for the home I bought earlier this year, but hesitated due to the whole ‘don’t put all your info out there where it can get indexed’ thing.

Before we came here, we were renting a nifty little 1953 mid-centry place on the north end, and wanted to buy it but the owners decided to restore it and move back in. I suppose I can share that one: https://www.zillow.com/homes/for_sale/house_type/48962454_zpid/47.592927,-122.229086,47.589211,-122.232922_rect/17_zm/

When we moved out the ZEstimate was still under $1M - now it’s $2,2M - I’m wondering if the light rail is a factor since it is within walking distance.

Comment by Bradford99
2018-07-16 16:36:39

That was an adorable house you were renting!! I hope the owners didn’t mess it up when they restored it after they asked you to leave.

Comment by MGSpiffy
2018-07-17 00:32:19

It was - do a google image search on “Mithun Nesland Architects” for a dose of mid-century goodness.

That house we rented was their take on a Frank Lloyd Wright Usonian house and it had so many FLW/Usonian details and features.

The house was built in ‘53 and the couple the built it both lived in until their late 90s, passing away in ‘08 and ‘10. They had 2 children whom inherited it and rented it out for a few years. ( Did I mention it was just $2K a month? :) ) Much of the house’s fixtures and appliances, etc were still original 1950s hardware - they don’t make ‘em like that anymore.

One of their kids didn’t want anything to do with the house and sold their half to the other, whose husband is an Architect and is leading up the restoration - I’ve seen the plans and it’s going to be real nice - preserving all the mid-century and Usonian elements while using modern tech and materials where it makes sense. I tried to see if we could buy it, but it was really sentimental for them. They’re selling their much bigger house that’s mid-island when it’s done and downsizing into it for their own retirement.

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Comment by Bradford99
2018-07-18 07:00:24

I love this story. I really like the early 1950s mcm houses. The house I mentioned was built in 1960 with minimal mcm elements; presumably that contributed to nobody wanting to buy it. I read somewhere that in the 1980s, you couldn’t give away a mcm house; now they are fashionable. It’s cheaper to buy things when they are unfashionable, right? I thought about what’s the ugliest house I can think of, it’s gotta be one with a mansard roof aka vertical shingles.

 
 
 
Comment by TIC TOK
2018-07-16 18:31:48

Yeesh that is 2m????

Looks like it needs another 500k in reno work at least.

For me a house needs to be really old, 1920s or older or fairly new.that 50s stuff is kinda meh.

Comment by oxide
2018-07-17 19:11:20

True 1950s mid-century modern is worth the hubbub if you do it right, especially if it has an FLW feel. It’s the cookie-cutter post-war ranches which are meh.

I prefer Craftsman myself. Or Tudor with Craftsman/Tudor interior. Or semi-storybook cottage with Craftsman interior.

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Comment by BlueSkye
2018-07-16 15:32:08

“ALthough it was overpriced, I can afford it. I decided that even if I lost a few hundred thousand on it, it would not ruin my life.”

Check your mania. Let’s say it’s overpriced by $500,000. If you borrow that consider it’s $1,000,000. How much money have you been putting into savings per year lately and how old are you? A decade or two of your life wasted sounds ruinous to me.

Comment by Mafia Blocks
2018-07-16 16:34:13

Not to mention the fact that paying new price x 5 or more for a used house is a failed strategy.

 
 
Comment by rms
2018-07-17 00:31:37

“I offered $836k, with the standard contingencies.”

Gulp… what’s wrong with you?

“The owners declined to respond to my offer…”

Wow… a close brush with financial death.

 
 
Comment by Mortgage Watch
2018-07-16 11:39:55

Las Vegas, NV Housing Prices Crater 10% YOY As For Sale Inventory Skyrockets

https://www.zillow.com/las-vegas-nv-89109/home-values/

*Select price from dropdown menu on first chart

Comment by Anonymous
2018-07-16 12:06:39

Bring it on!

 
 
Comment by taxpayers
2018-07-16 11:43:33

Inventory increased 1.1 percent in New York City,
3.1 percent in Miami

? wtf
both have been in the tank for over a year
even million dollar listing in NEW York the shows are all about dropping pants n prices

 
Comment by Mr. Banker
2018-07-16 13:19:30

Waaaaayyyy off topic …

Sound waves reveal diamond cache deep in Earth’s interior | MIT News

https://news.mit.edu/2018/sound-waves-reveal-diamond-cache-deep-earths-interior-0716

Comment by Mike
2018-07-16 13:45:35

off topic but very interesting

Comment by oxide
2018-07-17 19:16:06

sounds like a job for elon

 
 
 
Comment by azdude
2018-07-16 14:10:22

“Put another way, I believe there is a significant chance the Fed will let the stock market collapse in order to drive capital BACK into the bond market to force bond yields down.”

 
Comment by aNYCdj
2018-07-16 15:07:03

Its just not Wallmart ……Thousands Show Up To Fill 16 Spots For Sports Illustrated Swimsuit Open Casting Call

https://miami.cbslocal.com/2018/07/13/thousands-show-up-to-fill-16-spots-for-sports-illustrated-swimsuit-open-casting-call/

Comment by rms
2018-07-17 00:39:15

“Everything is for sale.” —John Gage

 
 
Comment by Mortgage Watch
2018-07-16 16:32:33

Sagle, ID Housing Prices Crater 9% YOY As Boise Housing Correction Expands

https://www.zillow.com/sagle-id/home-values/

*Select price from dropdown menu on first chart

 
Comment by Professor Bear
2018-07-16 16:34:44

This Is the City Most in Danger of a Housing Crisis, Study Finds
A housing crisis might hit this city, but others are at risk.
By Andrew DePietro
July 13, 2018
Real Estate Investing 101

The great housing bubble and crash of the 2000s is drifting into history, but remnants of its devastation still haunt many cities. Still worse, there are many cities displaying some ominous signs of housing troubles on the horizon.

In order to help people anticipate a potential future downturn, GOBankingRates conducted a housing study that analyzed more than 50 major U.S. cities. The principal factors evaluated include the percentage of homes with mortgages in negative equity, the total number of homes in negative equity, the number of homes at least 90 days late on their mortgage payment, the negative equity delinquency rate, homeowner vacancy rate and rental vacancy rate.

Keep reading to see which areas might be hit hardest by the crisis.

Comment by Taxpayers
2018-07-17 17:09:54

But zuckerberg(w a wall) gave Newark big money

 
 
Comment by Anonymous
2018-07-16 16:43:16

I’m intrigued about all these access issues Amazon is having.

Last Wednesday (July 11), Amazon.com was experiencing outages on the west and east coasts. I’m in Las Vegas and I discovered this when I tried to search for a book on Amazon. For about 15 minutes, I just kept getting their “sorry, something went wrong on our end” messages. This was on my laptop; accessing Amazon.com via the browser on my phone (NOT using their app) worked.

Today, more glitches caused problems for people trying to take advantage of Prime Day. And then there were problems for AWS (Amazon Web Services) clients trying to log in to their accounts.

“After reeling from technical glitches that prevented many shoppers from accessing bargains on Prime Day, the company’s biggest shopping day, the company announced another outage that makes it harder for Amazon Web Services customers to control their usage.”

https://www.cnbc.com/2018/07/16/aws-hits-snag-after-amazon-prime-day-downtime.html

Comment by In Colorado
2018-07-16 18:29:28

The demise of on prem is exaggerated

 
Comment by butters
2018-07-16 18:37:16

Amzn stock will rise another 20% after this news.

Comment by jeff
2018-07-16 21:06:38

“Amzn stock will rise another 20% after this news.”

https://www.youtube.com/watch?v=_ZuWllLXFNk

“Princeton could use a guy like Joel”

Hi hi hi hi hi
Hi hi hi hi hi, hi

Talking Heads Lyrics

Swamp

https://www.azlyrics.com/lyrics/talkingheads/swamp.html

Comment by Carl Morris
2018-07-17 09:49:57

“Princeton could use a guy like Joel”

“Sometimes you gotta say what the…heck.”

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Comment by aNYCdj
2018-07-16 20:56:30

I dont think i ever bought anything on amazon. If i want to listen to an artist i dont want to make 10 individual buys plus postage just sell me all 10 at once.

Comment by Anonymous
2018-07-17 10:15:15

??? You can buy downloads at Amazon, not just CD’s. Or maybe I misunderstood you.

 
 
 
Comment by Ben Jones
2018-07-16 19:48:26

Putin Accuses Hillary Clinton Of Accepting $400 Million Dollar Illegal Donation From Russia

https://www.youtube.com/watch?v=R8nameHMpZI

Comment by jeff
2018-07-16 20:51:45

Well they didn’t cover that on tonight’s CBS Evening News.

Comment by ibbots
2018-07-17 06:14:54

Not a good day for Trump. Went from bad to worse when he started talking about Putin’s people helping with the investigation.

Comment by BlueSkye
2018-07-17 08:18:36

What is wrong with that.

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Comment by ibbots
2018-07-17 08:52:51

If there’s a hostile foreign power that is interfering with an election, it’d be best not to tip them off as to how their interference was discovered.

Would you rather have the KGB or the FBI doing the investigation?

 
Comment by Mafia Blocks
2018-07-17 09:22:51

“If there’s a hostile foreign power that is interfering with an election,”

Nonsense hypothetic. I just wiped with and flushed an “if”.

There is a hostile domestic power that sought to maintain power through any means necessary including but not limited to laundering $400 million and conspired to interfere with an election using state resources including the FBI and CIA, do you expect a cover-up or a real investigation by the FBI?

 
Comment by rms
2018-07-17 10:46:28

“If there’s a hostile foreign power that is interfering with an election…”

This is exactly what the U.S. does the world over, and desperate Israel practices it too within our country. Money is the mother’s milk of politics.

 
 
 
 
Comment by rms
2018-07-17 00:43:14

Saint Hillary.

 
Comment by BlueSkye
2018-07-17 05:48:46

Is this why they are accusing Trump of Treason?

Can it get more ridiculous?

Comment by Albuquerquedan
2018-07-17 07:33:47

Honestly do not know if the charge is true. However the reaction to Trump winning by some people in the FBI and the intelligence community seems to be inconsistent with just the person I wanted loss, it seems to be consistent with I did illegal activities which would be covered up by Clinton but might be exposed under Trump and I could end up in jail. I must get Trump out of office before he finds out.

Comment by BlueSkye
2018-07-17 08:12:37

“Honestly do not know if the charge is true.”

I think the basis of the charge is that Trump did not attack Putin in front of the press when he had the opportunity.

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Comment by Albuquerquedan
2018-07-17 09:33:34

I was not clear I am more interested in the charge that Clinton received $400 million in illegal contributions. Both Clinton and Obama seem to be receiving illegal contributions from outside the US for their billion plus war chests but this seems to be too much. As far as Trump, this denouncing Putin demand just seems to be the globalists worried that two nationalists might team up to stop them.

 
 
 
 
 
Comment by Mr. Banker
2018-07-17 04:52:56

Here’s a short video that demonstrates the enoumous power that crowd behavior can exert on one’s individual behavior …

Prudential: Everybody’s Doing It
https://youtu.be/BgRoiTWkBHU

Comment by OneAgainstMany
2018-07-17 08:43:17

That’s why I chose the moniker “OneAgainstMany”. It’s my feeble attempt to try to go against the grain, which these days seems to be the madness of buying overpriced dwellings.

 
 
Comment by azdude
2018-07-17 06:15:38

I hope none of you got caught up in the NFLX ponzi and subsequent plunge.

This sh@t show seems so rigged you just cant make it up.

Comment by Anonymous
2018-07-17 10:17:43

And just think, most people are planning to retire based on the rigged Wall street casino.

 
 
Comment by azdude
2018-07-18 05:55:57

DEbT= MONEy

If the debt was paid down there would be no money.

Wouldnt an accurrate measure of monetary inflation be the amount of net debt that was created over a certain time + any funny money the FED created?

Debt creates a significant amount of monetary inflation.

 
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